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The increase was driven by a baby boom as fertility rates shot up to their highest rates in a generation.
The increase is the highest since modern records began in 1972 and more than twice the increase of 2001 when the population rose by 201,000.
Statisticians are now trawling historic records to confirm it is the biggest population increase in history.
For the first time in nearly a decade natural changes to the population caused by shifts in birth and death rates have overtaken immigration as the biggest factor affecting population growth.
The vast wave of immigrants who came here from Eastern Europe after the EU expanded in 2004 has slowed to a trickle, as the recession took hold, the figures showed.
Arrivals from the A8 countries of Eastern Europe fell by more than a quarter - 28% - from 109,000 to 79,000 in the year to December last year.
More Eastern European immigrants went home in the same period - up by more than 50% to 66,000.
Overall migration levels - the numbers arriving minus those leaving - fell 44% to 118,000 - the lowest since EU enlargement.
The most recent figures showed a huge increase in returns, as the number of A8 workers registering for employment fell 42% to 116,000 in the year to June this year.
Chief statistician Karen Dunnell said the emigration was probably due to the economic downturn.
She said: "You have to say that probably the unemployment and the economic situation, given that quite a lot of people from the A8 countries are coming to work, is probably having an impact."
The ONS later confirmed the increase in population was the highest in nearly 50 years.
In 1962 the population rose by 484,000 and in 1947 the post-war baby boom drove up population levels by more than half a million (551,000).
The surge in Eastern Europeans returning home and the decline in arrivals
meant they added only 13,000 to the total population last year.