Crippling rent rises and a surge in zero-hour contracts alongside the demise of the oil industry and a cap on benefits have combined to tip thousands of families into despair.
Scottish Government figures show there have never been more youngsters growing up in hostels and bed and breakfasts.
At the end of March, there were 781 children in Edinburgh without a stable home, the highest figure since records began in 2002 and a 58 per cent rise on the same time last year.
Unprecedented numbers were also seen in West Lothian (314; up 31 per cent), East Lothian (251; up 36 per cent) and Aberdeen (117; up 75 per cent).
There were also large rises in Glasgow, Dundee and Lanarkshire.
Robert Aldridge, chief executive of Homeless Action Scotland, claimed Scottish children are suffering as a result.
He said: “Children should not have to grow up in a hostel or a B&B because it deprives them of the conditions they need for their educational and emotional development.
“These figures are a stark warning that housing policy is failing to cope with market forces and austerity.”
Homeless applications have been falling year-on-year since 2008/09 and dipped a further 2 per cent in 2016/17.
But it is low-paid families who are increasingly feeling the pinch.
Across Scotland, the number of children in temporary accommodation peaked at 6,268 in 2008.
Now, though, the figure is climbing fast, up 16 per cent last year from 5,223 to 6,041.
Mr Aldridge said: “The fact there are hotspots where there is a rapid explosion in numbers of families in temporary accommodation shows the housing market is volatile, something people on fixed incomes can struggle to cope with. Rents are going through the roof in some parts.”
Scottish Labour’s housing spokesperson, Pauline McNeill, MSP, described the situation as “distressing”.
Equalities Secretary Angela Constance, said the Scottish Government was working hard to reduce child poverty.