Around 2,000 babies have suffered serious defects such as spina bifida since 1998 owing to the Government's failure to add folic acid to flour, researchers have said.
These cases - around 150 a year - could have been avoided if the UK had followed 78 other countries and added the key vitamin to flour, they said.
Rates of neural tube defects - birth defects of the brain, spine or spinal cord - are not falling across the UK, resulting in death of the foetus or newborn baby, or life-long disability in those who survive.
Last month, Government advisers wrote to ministers expressing their concern that recommendations made in 2000, 2006 and 2009 to improve levels of folic acid intake had still not been taken on board.
Members of the Scientific Advisory Committee on Nutrition (SACN) pointed to a rising number of abortions in England and Wales for neural tube defects, with 420 in 2013, up from 390 in 2012 and 299 in 2009.
Women are urged to take 400mcg of folic acid daily whilst trying to conceive and for the first three months of pregnancy to cut the chance of neural tube defects, which include spina bifida and anencephaly.
However, research has found that over 70% of women do not take the supplements regularly or early enough in pregnancy.
In the US, fortifying flour with folic acid has led to a 23% reduction in neural tube defects.
The new research, published online in the Archives of Disease in Childhood, estimates the number of defects that could have been avoided if the UK had adopted a flour fortification policy in 1998, the same year the US adopted the policy.
Researchers said 2,014 cases of defects could have been prevented - equivalent to a 21% drop in cases. They said asking women to take supplements was not working and that fortifying flour was "remarkably safe".
They said: "Our results show that in the UK between 1998 and 2012, there was little, if any, change in the prevalence of pregnancies with a neural tube defect, while in the USA, quickly following the introduction of mandatory fortification of flour with folic acid in 1998, there was an approximate 23% reduction in the occurrence of affected births.
"Given the evidence from the Medical Research Council Vitamin Study regarding the efficacy of folic acid in preventing neural tube defects, the failure of Britain to fortify flour with folic acid has had significant consequences.
"The recent evidence that only 28% of pregnant women in England in 2012 took folic acid supplements at the correct time indicates that, in practice, recommending folic acid supplementation is largely ineffective."
From 1998 to 2012, some 1.28 pregnancies per 1,000 births were affected by a neural tube defect, of which 81% resulted in an abortion.
The research was carried out by experts including from Queen Mary University London, Public Health England (PHE) and Oxford University.
They compared the situation with thalidomide, which resulted in the births of 500 people with disabilities in the UK.
"Justifiably, steps were introduced to immediately halt the epidemic, and regulatory precautions were introduced to avoid another similar epidemic," they said. "Unfortunately, no such sense of urgency has been applied to the prevention of spina bifida.
"It is a public health failure that Britain has not implemented the fortification of flour with folic acid for the prevention of spina bifida and other (neural tube defects)."
They said this failure "has caused, and continues to cause, avoidable terminations of pregnancy, stillbirths, neonatal deaths and permanent serious disability in surviving children".
Dr Alison Tedstone, chief nutritionist at Public Health England, said: "Implementing the Scientific Advisory Committee on Nutrition's advice to add folic acid to flour would reduce the risk of birth defects, such as spina bifida, in pregnancy.
"PHE's analysis shows that 85% of 16 to 49-year-old women have folic acid levels below the new World Health Organisation recommendation for women entering pregnancy.
"This highlights the importance for pregnant women, and those trying or likely to get pregnant, of taking a daily folic acid supplement of 400 micrograms - before and up to the 12th week of pregnancy."
Professor Alan Cameron, vice president of clinical quality for the Royal College of Obstetricians and Gynaecologists (RCOG), said: "There is strong evidence to suggest that folic acid supplementation before pregnancy reduces the number of pregnancies affected by neural tube defects, such as spina bifida.
"The RCOG is calling for mandatory fortification of bread or flour with folic acid in the UK with the appropriate safeguards, such as controls on voluntary fortification by the food industry and better guidance on supplement use.
"Food fortification will reach women most at risk due to poor dietary habits or socio-economic status as well as those women who may not have planned their pregnancy."