Nick Clegg will announce £1bn of new funding on Friday to help prevent another lost generation of young jobless people. The money, to be spent over three years, will provide opportunities including job subsidies, apprenticeships and work experience placements to 500,000 unemployed people.

The opposition said the move represented a U-turn and was in effect a revised version of Labour's future jobs fund, cancelled by the coalition government when it came to office.

After protracted negotiations inside the government, ministers will subsidise 160,000 work places by providing £2,275 to any private-sector business willing to hire an unemployed 18- to 24-year-old.

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