Regions where the Government's controversial "fit for work" assessments have been carried out have seen hundreds of extra suicides and thousands more prescriptions being issued for anti-depressants, research has found.
Experts from Oxford University and Liverpool University warned there could be "serious consequences" from the policy to move people off benefits, which they said was introduced without any evidence of its potential impact.
They found 590 extra suicides, 279,000 extra cases of mental ill-health and 725,000 more prescriptions for anti-depressants across England in areas where people had work capability assessments (WCAs) between 2010 and 2013.
Other experts said the evidence "goes beyond merely establishing a correlation" but falls short of establishing a direct cause between WCA and suicide.
It comes after a coroner's report in September blamed the suicide of disabled man Michael O'Sullivan on the WCA and warned of the risk of more cases.
Mr O'Sullivan, a 60-year-old father of two from north London, was moved from employment support to jobseeker's allowance despite having reports from three doctors saying he had long-term depression and agoraphobia and was unable to work.
The new research, published in the Journal of Epidemiology and Community Health, said the WCA might have taken a "serious" toll on mental health.
It found that the areas with the greatest use of WCA had seen the sharpest rises in suicides, mental health issues and anti-depressant prescribing.
The experts analysed the numbers of disability assessments carried out in 149 local authorities in England between 2004 and 2013, and looked at local trends such as suicide rates among 18 to 64-year-olds.
Between 2010 and 2013, more than a million people claiming disability benefit were reassessed using the WCA. People who were reassessed were more likely to live in deprived areas.
The results showed that in areas with higher rates of reassessment, there was a corresponding rise in suicides, mental health issues and anti-depressant prescribing.
After taking account of the impact of baseline deprivation, economic trends, and long-term trends in mental health, the researchers calculated around six extra suicides, 2,700 more cases of mental ill health and an extra 7,020 prescriptions for anti-depressants for every 10,000 people reassessed during this period.
They said this equated to 590 additional suicides, 279,000 extra cases of mental ill-health and 725,000 more prescriptions for anti-depressants across the country as a whole between 2010 and 2013.
The experts concluded: "The programme of reassessing people on disability benefits using the work capability assessment was independently associated with an increase in suicides, self-reported mental health problems and antidepressant prescribing.
"This policy may have had serious adverse consequences for mental health in England, which could outweigh any benefits that arise from moving people off disability benefits."
They added: "Although the explicit aim of welfare reform in the UK is to reduce 'dependency', it is likely that targeting the people living in the most vulnerable conditions with policies that are harmful to health will further marginalise already excluded groups, reducing rather than increasing their independence."
The researchers stressed the study was observational and no firm conclusions on cause could be drawn.
Professor Thom Baguley, associate dean for research at Nottingham Trent University, said: "The study provides evidence that the specific application of this policy (the way reassessment of cases was conducted) increased the suicide rate and outcomes associated with adverse mental health in those people affected.
"The evidence goes beyond merely establishing a correlation but falls short of establishing a causal link.
"The researchers have been careful to control for important confounding variables and conducted a range of alternative analyses to eliminate other explanations.
"However, it is extremely difficult to rule out all other explanations - especially when dealing with aggregated data (averages at the local authority level). This is therefore an important step forward in answering the question rather than a definitive answer."
Jed Boardman, from King's College London's Institute of Psychiatry, Psychology and Neuroscience, said: "The findings show a strong association between the reassessment rates for employment and support allowance (ESA), carried out through the work capability assessment (WCA) process, in local areas of England and the local trends in suicide, self-reported mental health problems and antidepressant prescribing."
The charities Mind, the National Autistic Society (NAS) and Rethink Mental Illness said: "We know many people with mental health problems, learning disabilities and autism want to work, but face huge barriers because of the impact of their condition and the stigma and discrimination they often face from employers.
"But for those who can't work, the work capability assessment is causing acute anxiety and stress, and people are being wrongly found fit for work."
A DWP spokesman said: "This report is wholly misleading, and the authors themselves caution that no conclusions can be drawn about cause and effect.
"In addition, it is concerning that they provide no evidence that the people with mental health problems highlighted in the report even underwent a work capability assessment."