Launched amid a fanfare of publicity by ITN newscaster Trevor McDonald, the Better English campaign aims to make young people more aware of the need to be able to speak and write clearly.
Its formation follows complaints by the Education and Employment Secretary Gillian Shephard about teenagers who "communicate by grunt", and concern on the part of employers and higher education institutions that school-leavers lack essential skills. Its administrative costs and a small promotional budget for two years will be paid for by the Department for Education and Employment.
The CBI, the Plain English campaign, the Commission for Racial Equality, the National Literacy Trust and several broadcasters and newspaper publishers have pledged their support.
Mr McDonald said falling standards could only be reversed by a long-running campaign to encourage pride in the language.
"The cultural climate is not something that can be changed by throwing money at big advertising campaigns. We are trying to be very inclusive because we realise we cannot do this on our own."
According to Ruth Moore, a member of the campaign and of NATE, children already understand how language operates in different contexts and media, and can express themselves effectively with friends and family.
But she added: "Not all students have the confidence to transfer those skills to the outside world. I think they believe it is someone else's language. We have got to create ambitious kids who believe they have a future - language skills are an important part of that."
Ms Moore, a primary teacher from Northumberland, said drama lessons were a valuable means of improving children's use of language. Drama should be included in the national curriculum.
Initiatives announced by the campaign include a two-week campaign in Manchester by Piccadilly Radio and Community Service Volunteers to offer young people opportunities to improve their skills.
Several national magazines will be sending staff into schools to help pupils create their own magazines. The cable TV company Channel One is sponsoring a young video journalist competition for London schools.
All government departments have been asked to investigate how, as employers, they can support the campaign. And Jobcentres will be stocking leaflets giving information on how to make the most of language skills in the job market. Although careful not to blame schools, Mr McDonald said he was surprised to hear of highly-educated students who failed job interviews because of their inability to communicate properly.
He said: "It is terribly easy to get into a great debate about whether education has failed or not. It seems to me that, regardless of what is happening, there is an area where we can help young people recognise the importance of communication skills."
However, a note of scepticism was sounded by the main examination boards who already give more weight to grammar, spelling and punctuation in their marking.
"The campaign might not be absolutely vital because it is already there in the school system," said Kathleen Tattersall, who chairs the Joint Forum of GCE and GCSE chief executives. "I rather suspect that examinations might focus [students'] minds more than hype in the media."
George Turnbull, of the Associated Examinations Board, said: "It's a bit like the Richard Branson initiative with the Tidy Britain Campaign: we still have litter. There is no doubt that young people need to be able to communicate properly, but you have to say what the problem is. You need to have aims and objectives, not vague generalities which don't mean much."