Money from the Department of Employment - averaging nearly Pounds 8,000 for each trainee on the workplace-based programmes now being piloted around the country - is double the amount offered for Youth Training schemes, reflecting the longer, more sophisticated content of the courses.

For small firms, often desperately in need of a better trained workforce, but unsure of the benefits of investing in new schemes, the cash could be crucial, restaurateur Prue Leith told business people and educationists at a forum held last week in London.

“There’s a reluctance on the part of all small businesses to do anything they know nothing about - but once you get them in they’re hooked. Seven or eight thousand pounds would be a huge incentive to a small restaurateur,” she told the forum which was organised by the training charity, UK Skills.

But larger firms would prefer to see a firm’s “out-of-pocket expenses” for training paid by the Government, although there was little enthusiasm for a return to the industrial training levies scrapped a decade ago, other speakers said.

Lindsay Millington, chair of the National Council of Industry Training Organisations, said: “The money is disappointing, although it is better than that available for programmes in the past. As industrial training organisations we recognise this is the first time the Government has specifically made money available to raise skills and increase competitiveness.

“But in many industries the money will not be sufficient to pay the training costs. Increasing the money to cover out-of-pocket training costs would be welcome.”

Ms Millington, also chief executive of Steel Training Ltd, said her own industry was unlikely to welcome any move to reintroduce a compulsory training levy - already being discussed by Labour leader Tony Blair and not ruled out by the Confederation of British Industry.

There was a valid debate over how the costs of reskilling the nation to meet the demands of global competition should be shared, but incentives through the tax or national insurance system would be preferable to an industrial levy, she added.

“If a levy were introduced it would be the kiss of death to distribute it through the training and enterprise councils - it would disappear into the Government’s overall contribution to training. It would be better done by the industries themselves.”

Unions still favour a statutory levy, although Brendan Barber, the TUC’s deputy general secretary, said bureaucracy would need to be kept to a minimum.

Employers were generally enthusiastic about the potential of the Modern Apprenticeships - currently being piloted in 14 work areas - to deliver motivated, skilled and versatile employees trained for a career in industry. Launched earlier this year by David Hunt, the then Employment Secretary, Modern Apprenticeships are intended to give trainees the status of employees, with competency- based training leading to an National Vocational Qualification level 3 qualifications and training people for a career rather than simply a job.

Mike Heron, chairman of the National Council of Vocational Qualifications and the Post Office, challenged larger firms to bring small companies into Modern Apprenticeships by helping to train their staff.

“I challenge industry to do this. The costs and overheads for large firms are already there; the benefits to small businesses would be enormous.”

Fears that investment in training could be lost by other firms “poaching” newly-qualified employees were unfounded, he argued. Companies which invested in training and were supportive of their workers tended to have lower staff turnover.

Alan Benjamin, chairman of computer company Alphameric, predicted that information technology would be a way to involve firms reluctant to invest in training as business confidence still lagged behind economic recovery. Employees could access computer-based training material whenever they were free, with the firm paying only for what was used.

“There’s an unrivalled opportunity here in the UK for educationists to be involved in the design and creation of these sort of learning packages. ”

He warned that industry could not afford to lose ground to oversees competitors - virtually all of whom were investing heavily in education and training. And he suggested that firms should be compensated for training appropriate numbers of workers to ensure national skills targets were achieved.

NVQs were unanimously endorsed by the forum as the way to deliver the Modern Apprenticeship. The growing movement that it was “cool to stay at school” meant that the higher expectations of the 70 per cent of teenagers who now stayed on must be met. Only a third would go on to college or university - NVQs were a crucial “middle way” between the academic path and educational vocational qualifications.

Dr Ian Johnston, head of the Department of Employment’s training, enterprise and education directorate, said Modern Apprenticeships offered employers an excellent opportunity to improve skills.

“People have been saying for years that they would like to provide a high-quality training route for young people. The message is simple: that opportunity is now with us.”