Rape and sexual offences reported to the police have rised sharply this year, attributed in part to the high-profile Jimmy Savile investigation with victims encouraged to report historic sex crimes.
New figures show that crime has fallen to a new low despite cuts to police budgets and rank and file numbers.
The Office for National Statistics identified decreases across all the main categories of victim-based crime compared with the previous year, except for theft from the person (which went up 9%) and sexual offences which rose by 1% overall, with a 2% increase in rapes.
This has been attributed to the police inquiry into sex attacks launched in the wake of the Savile scandal, and wall-to-wall media coverage urging victims to come forward.
"The latter increase is thought to be partly a 'Yewtree effect' whereby greater numbers of victims of sexual offences have come forward to report historical offences to the police," the ONS said.
Shadow home secretary Yvette Cooper said there was "worrying evidence that the service provided by the police is being hollowed out as 15,000 police officers are being cut", pointing to the "significant" decline in sexual cases referred to prosecutors despite an increase in recorded offences.
ONS crime statistician John Flatley said the number of sexual offences reported could continue to rise.
"What we are seeing in the figures today is that a greater number of victims of historic offences are coming forward to report crimes that happened years ago," he said.
"Around half of the forces have given us information to show 950 victims have come forward to report offences that happened more than 20 years ago. That's obviously driving the overall figures up.
"It's possible the wider Yewtree effect could lead to an increase in sexual offences reported for a period still to come.
"I wouldn't be surprised to see these figures continue to rise over the next few months."
Fraud has soared by 27% though overall crime is down by 9% on last year - the lowest level since the Crime Survey for England and Wales began in 1981.
An additional one million offences - which are not included in the police figures - were dealt with by the courts in the year ending December 2012, the ONS said.
These cover less serious crimes such as speeding offences.
Prime Minister David Cameron hailed today's figures as "good news".
Speaking during a visit to Hammersmith police station in west London, the Prime Minister said: "This is good news because we see a reduction both in recorded crime and in the British Crime Survey, which shows that crime now is at its lowest level since 1981.
"I think we should congratulate the police. As a Government we have asked them to do more with less resources. They have performed, I think, magnificently and I think all the work that has gone into crime prevention has helped as well.
"This is good news, that Britain is getting safer as well as stronger."
The statistics were released as it emerged the number of police officers in England and Wales has fallen for the fourth consecutive year - by 3.4% or 4,516 - taking the total to its lowest level since 2002.
The biggest drop was seen in the Metropolitan Police which is down 1,742 officers (5.4%), the Home Office said.
Proportionally, the forces that decreased most dramatically in size were Staffordshire (down 118 officers - 6.1%) and the City of London (down 57 officers - 6.8%).
The figures were revealed as Steve White, the vice-chairman of the Police Federation, claimed some officers were being forced to work 14 days straight due to numbers being stretched.
Cameron acknowledged that police forces had been coping with reduced resources, but said they had responded by working more smartly.
"They are facing a difficult time," said Mr Cameron in a round of broadcast interviews. "I want to thank them for doing more with less.
"If you look at the overall number of people employed in the police, including back office staff, that's come down by something like 30,000 people in the last few years. But the number of actual police officers shows a much smaller reduction of around 3%.
"What we are finding is that a greater percentage are now on the front line, the number of neighbourhood officers has gone up over the last three years, because the police are working better, working smarter, spending more time on the streets, which is where people want to see them."
An estimated 8.6 million crimes took place in England and Wales according to the ONS data, which was based on interviews with a representative number of households in the year ending in March. This showed the 9%
drop in overall offences.
Meanwhile police recorded 3.7 million crimes in the same period - a decrease of 7% on the previous year. This is the lowest level since 2002/03 which saw the last major change in the way police collate figures.
Forces handled 2.3 million occurrences of anti-social behaviour last year - a decrease of 17% on the previous 12 months. Meanwhile officers noted a 15% drop in firearm offences during the same period.
Deputy chief constable Jeff Farrar, head of crime and statistics at the Association of Chief Police Officers (Acpo), welcomed these figures but warned forces have yet to feel the "full effect" of cuts.
Meanwhile, he said the increase in fraud and the threat of terror attacks placed an immense strain on police.
"Criminals are adopting new tactics and crime is moving away from more traditional forms to the online world," he said.
"Additionally the threat from international terrorism continues to loom large and will continue to put communities at risk and place immense pressure on policing - the impact this has on police resources cannot be underestimated.
"The need for policing to deliver safe and confident neighbourhoods and engage effectively with the public will remain so we are disappointed to also see in today's figures that theft against the person is up 9%."
He added: "Chief officers around the country have been proactive about the reduction in their resources and have worked very hard to ensure that cuts have had as little impact as possible on frontline policing.
"We recognise the challenges ahead and remain resolutely committed to protecting the public which we serve but I suspect the full effect of the cuts has not yet been truly felt."
Labour's Cooper said: "It is very welcome that the fall in overall crime levels is continuing its long term trend of the last 20 years. Better policing methods and the huge, continued efforts of the police and communities under considerable pressure should be applauded."
Cooper called for more action to tackle cybercrime, after a 27% increase in fraud, much of it committed online.
"999 delays are also growing with many crime victims now waiting over 10% longer in an emergency for the police to arrive," said Cooper. And neighbourhood policing is being reduced with long term consequences for communities.
"The police are doing an impressive job in increasingly difficult circumstances and they will continue to do everything possible to tackle crime, deliver justice and keep the public safe. But Acpo have warned that the full effect of the cuts is not yet being felt.
"As the Government has made it so much harder for the police, they should not try to take credit for the work the police and communities are doing."