John Hayes, the further education minister, told the annual conference of the Association of Learning Providers (ALP) this week that functional skills had been due to replace key skills in apprenticeships later this year.
But Mr Hayes said the introduction of functional skills, which are designed to offer practical education in English, information and communication technology (ICT) and mathematics across a number of qualifications ranging from GCSEs to apprenticeships, had to be examined further.
"That is why, after speaking to providers, I have decided to extend the use of key skills in apprenticeship frameworks to March 2011 and continue to consult with the sector on the best way forward," he said.
The ALP fears functional skills are designed for school pupils and will not meet the needs of apprentices or adults. While key skills are successful in delivering basic skills, the ALP is worried success rates will fall under functional skills.
ALP leaders have also called for a single procurement agency for all employment and skills provision.
Martin Dunford, ALP chair, said: "We need ministers to be even bolder if we want to avoid a lost generation of young people and a raft of employers complaining that they don't have skilled recruits available to take advantage of any upturn."
The ALP has submitted a six-point plan to the Government on how to provide a more cost-effective FE and skills system. Recommendations include providers being rewarded for successful outcomes and a preferred supplier register.