This year’s Palme d’Or was Ken Loach’s second award for best picture at the festival after 2006’s The Wind That Shakes the Barley.
Ken Loach, 79, attacked the “dangerous project of austerity” as he accepted the award for his movie about a middle-aged widower and the UK welfare system.
Andrea Arnold won the competition’s Jury Prize for her road movie American Honey.
It was the 13th time that Ken Loach, a social campaigner for most of his career and the director of more than 50 movies, has competed at the event.
I, Daniel Blake, which stars stand-up comedian Dave Johns in the title role, was written by Ken Loach’s long-time collaborator Paul Laverty.
The movie documents what happens when an older man living in Newcastle has a heart attack and can no longer do his job.
He is declared fit for work, meaning his benefits are stopped, and he begins to go hungry.
Accepting the festival’s top prize from Mel Gibson, Ken Loach said: “We must give a message of hope, we must say another world is possible.
“The world we live in is at a dangerous point right now. We are in the grip of a dangerous project of austerity driven by ideas that we call neo-liberalism that have brought us to near catastrophe.”
In the movie, Dave Johns meets single-mother of two Katie, who moves to Newcastle from London.
Cannes judges praised the actors’ depictions of the characters who “find themselves in no-man’s land, caught on the barbed wire of welfare bureaucracy as played out against the rhetoric of ‘striver and skiver’ in modern day Britain”.
It was the first movie role for Dave Johns, who said he was delighted by the French film prize.
Dave Johns said: “Ken made a film 50 years ago called Cathy, Come Home and this is actually in the same vein, saying that people who are on the bottom rung of life, you know are struggling.
“I’m a stand-up comic. Working with Ken was just absolutely the most amazing thing and this news that we’ve won the Palme D’Or – I’m just blown away with it. “
Ken Loach was up against directors including Spanish Oscar-winner Pedro Almodovar, Sean Penn and Paul Verhoeven.
Iranian movie Forushande (The Salesman) by Asghar Farhadi won two awards at the 69th staging of Cannes – best screenplay, and best actor, won by Shahab Hosseini.
The Grand Prix went to Juste la Fin du Monde (It’s Just the End of the World), directed by Canada’s Xavier Dolan, while Philippines’ Jaclyn Jose won best actress for her role in Brillante Mendoza’s Ma’ Rosa.
Andrea Arnold won the competition’s Prix du Jury (Jury Prize) for American Honey.
American Honey, starring Shia LaBeouf, follows a group of wild youths as they travel through US states selling hard luck stories and magazine subscriptions.
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