The Nuffield inquiry proposes that languages should become a specified part of the 16-19 curriculum, and a requirement for designated vocational qualifications as well as for university entry.
The inquiry, a two-year independent investigation into the nation's capability in foreign languages, which was co-chaired by newsreader Trevor McDonald and Sir John Boyd, Master of Churchill College, Cambridge, looked at the overall languages needs of the entire UK over the next 20 years.
It found that "critically few" students - only one in 10 - go on to take languages post 16.
Students find they face narrow horizons and a limited choice and far too few vocational students study a language, even on those courses where it would be an advantage.
"Further education colleges offer GNVQ courses in areas such as tourism, hospitality, business - all fields in which the UK would benefit from more employees with expertise in languages, even at basic levels," says the report.
"However, very few students on vocational courses study a language, and this leads both to national shortages and employers recruiting from other countries"
There is also great inequality of access to language learning for adults, it says, and a lack of coherence in the language provision currently offered - despite high demand.
"We do have evidence of high level of adult demand for languages which is not being satisfied," said the inquiry's secretary Alan Moys.
"The current funding regime for FE makes it quite difficult for course organisers to put on the range of courses they would normally have done in the past.
"The general view is that the funding regime has turned further education for 16 to 19-year-olds into a complete desert for languages."
More generally, the Nuffield inquiry team found that the country's relative monolingualism is making it vulnerable in the face of international competition for employment, where potential employees from a non-English speaking background gain credit because they also speak another tongue.
It criticises the lack of a national strategy for languages, and says there is a wide gulf between business language needs and what education supplies.
Other proposals include enhancing language learning with ICT, boosting links between employability and languages with more education-business partnerships, and exploring ways of linking community languages with vocational courses in colleges.