Cohabiting couples who break up should be able to claim financial support from their former partners, the Law Commission has recommended.

A report by the body says the majority of couples who live together wrongly believe they are protected by "common law marriage" and would be entitled to a share of the assets when a relationship breaks down.

It says compensation should be available to unmarried couples who have children or who have been together for a minimum of between two and five years, although it stopped short of awarding couples the same rights as those who are married.

The financial value of each partner's contribution during the relationship should be taken into account, the report said.

However, unlike divorce, maintenance would not have to be paid and assets would not necessarily have to be split equally, with an opt-out scheme giving couples the freedom to make their own arrangements should the relationship end.

The Law Commission said: "Merely moving in with someone would not give rise to any entitlement to a remedy."

Stuart Bridge, the commissioner responsible for the reforms, said: "More and more families involve couples who are living together but who have not married.

"The law that currently applies to resolve property disputes between such couples on separation is unclear and complicated, and it can produce unfair outcomes.

"This causes serious hardship not only to cohabitants themselves, but also to their children. The scheme we are recommending, in the light of consultation, is distinct from that which applies between spouses on divorce.

"It would not apply to all cohabitants and where it did apply would only give rise to remedies relating to contributions made to the relationship.

"We do not accept the argument that such reform would undermine marriage. We consider that our scheme strikes the right balance between the need to alleviate hardship and the need to protect couples' freedom of choice."