A scheme giving free breakfasts to all primary school pupils in one of Britain's most deprived towns has been declared a success after a study found it made children happier and more alert, and had the potential to improve attendance and punctuality.

Blackpool council said positive early findings from the three-month pilot had persuaded it to go ahead with a £1.3m scheme to provide a nutritious breakfast of fruit, yoghurt and bread to all of its 12,000 primary pupils for the next year.

The scheme, the only one of its kind in England, was introduced amid concern that many low-income families in the area, particularly those hovering just above the poverty line, were struggling to feed their children adequately before school.

Successive surveys have seen teachers report an increase in pupils who arrive at school hungry, with the result that they were often unable to concentrate and prone to misbehave. The council hopes the scheme will improve pupils' health and wellbeing and push up academic attainment levels.

Blackpool is England's sixth most-deprived areas, with one in four working adults claiming unemployment or incapacity benefit – double the national average. A recent study by Sheffield Hallam University (pdf) found Blackpool would be hit hardest by welfare cuts, losing an average £914 a year per working-age adult.

Neil Hodgkins, headteacher of Devonshire primary school, said the scheme confirmed there was a need for free breakfasts in Blackpool's schools. "Children who had previously had nothing, or very little, to eat first thing are now enjoying a nutritious start to the day and presenting themselves as being livelier, more alert and ready to perform better in class.

"Although it is still early days to be quantifying this in terms of academic results or attainment value, we are seeing other benefits such as improved punctuality and attendance, the development of social skills at breakfast and the good habit of indulging in healthy eating at what many consider to be the most important meal of the day."

Carmel McConnell, chief executive of the Magic Breakfast charity, which has worked with the London mayor, Boris Johnson, on a smaller-scale charity school-breakfast scheme in the capital, said: "The Blackpool council breakfast pilot success deserves to be recognised, not only because of the bold decision to invest in hungry children, but also because of the impressive range of social and educational benefits they've seen after just a few months.

"It shows that school breakfast provision drives educational outcomes as well as being a vital lifeline for families hardest hit by the recession.

"With above 10,000 children a year hospitalised with malnutrition, Blackpool council have shown great moral leadership by putting the needs of children first."

More than 11,000 breakfasts have been delivered daily in Blackpool's 33 primary schools since the scheme began in January, and 70% of children took up the offer of a free breakfast. Pupils are offered a drink and two items from a menu that includes malt loaf, bagels, fruit, raisins, yoghurt and smoothies.

The evaluation, by Northumbria University nutritionists, found that prior to the scheme some teaching staff had been providing food on an ad hoc basis for a minority of pupils.

One told researchers: "To be honest with you, it defies belief how many children just don't have breakfast … in some cases it actually makes me quite upset because a lot of the children come in and you can tell they've not had breakfast and they've probably not had breakfast for days."

Teachers felt that although the scheme was justified, there needed to be a review of the type and amount of food provided. Some were concerned that parents might have become reliant on the scheme.

Children told researchers they felt happier and more alert after receiving breakfast at school, and that they enjoyed socialising with friends before school started.

The leader of Blackpool council, Simon Blackburn, said although more evaluation was needed, the initial findings justified the continued investment, expected to be approved this month.

He said as well the nutritional and educational benefits, the scheme was designed to tackle poverty.

"If you can relieve parents of the burden of £15 a week, and enable them to spend that money in the local economy, that's important. This is not about helping kids whose parents are on benefits, it's about people earning £12-13,000 and struggling to make ends meet."

The Welsh government provides free school breakfast in nearly three-quarters of its primary schools. It says the scheme has improved attendance, discipline, behaviour and concentration levels among pupils.