Graham Hoyle, chief executive of the Association of Learning Providers, said: "Our members, who deliver the majority of apprenticeships in this country, will be pleased that the government has taken on board several of our proposals to make apprenticeships more attractive to employers and individuals. More flexible funding to allow more adults to embark on apprenticeships is especially welcome. We also like the proposed safeguards against watering down the apprenticeship brand which should quite rightly, wherever possible, be linked to the individual having a contract of employment.

"We still have concerns, however, that the government hasn"t fully cracked the relationship between apprenticeships and the new 14-19 diplomas, but we will see how things develop on this front.

"ALP has been in the forefront of the debate on closer integration between employment and skills policies. Therefore it is encouraging to see further measures announced today which will see employers signed up to Local Employer Partnerships gain access to the Train to Gain programme."

The CBI was supportive of the move to get more young people to take on-the-job training and gain qualifications in the skills that business needs to compete. But Deputy Director-General John Cridland said that quality was as important as quantity: "Reform of the apprenticeship system is vital, otherwise the relevance and status of apprenticeships will suffer and more employers will not get involved."

He said that setting up a National Apprenticeship Service to deliver and be fully accountable for the programme and creating a "matching service" to help employers fill apprenticeship vacancies are positive steps, but added: "The government must also address poor quality careers advice, enable apprenticeships to adapt more quickly to firms" changing skill needs and ensure that the way literacy and numeracy skills are taught shows young people their relevance in the workplace. Employers are willing to play their part by promoting the benefits to young people in schools."

The TUC took the opportunity to push for fair pay for apprenticeships. TUC General Secretary Brendan Barber said: "Although the poorest paid apprentices, often young women, are now protected from the worst ravages of exploitation by an £80 wage floor, this has not increased since August 2005. Rising prices mean this is effectively a pay cut.

"The Government could further boost the quality of apprenticeships, make them more attractive to young people and improve completion rates by increasing the wage floor to £110. This would bring apprenticeship pay broadly into line with the minimum wage for 16-17 year olds."

David Frost, Director General of the British Chambers of Commerce, said: "It is vital that the Government tackles the problems businesses face when trying to find young people with the right attitude and skills for work. The UK skills shortage is not a new issue and we need business led initiatives to help reduce the growing gap.

"Whilst we welcome proposals to expand apprenticeships and to provide support to those businesses who take young people on, the schemes will only succeed if they are rigorous, of a high standard and work for both young apprentice and the employer."

Apprenticeship places to double says PM