Only Greece and Mexico come off worse in the OECD rankings of participation rates at school, college and university in the table listing 22 nations in North America, the Pacific area, the European Community and other European countries.

The most alarming evidence, however, is the speed with which the majority of nations are increasing their stay-on rates. A senior researcher and policy consultant for the OECD warned that the acceleration in many nations was much faster than in the UK.

He warned any interpretation of successes in the Government’s Competitiveness White Paper should be treated with caution. “International comparisons show for the first time how even the near doubling of the 17-year-old participation rate in the UK for 1985-94 left us behind other countries - where three-quarters to nine-tenths of 17-year-olds are typically still in full-time education. ”

Critics this week accused ministers of using the white paper to deflect attention from its central failures in basic skills, participation rates and under-funding.

Education and Employment Secretary Gillian Shephard pledged at the white paper launch to raise standards by introducing learning credits for all 16 to 19-year-olds by autumn next year.

A consultation paper will be published this autumn, spelling out the phased introduction of a scheme bringing together existing youth training guarantees, the Further Education Funding Council’s duty to provide for all who want a college place and a clear careers advice and guidance entitlement.

As The TES four-page analysis of the white paper (pages 11-14) shows this week, most see this as the first step towards full vouchers. Credits were welcomed by the Confederation of British Industry and - with reservations - the training and enterprise councils. But the Institute of Directors was “lukewarm” on them while most professional organisations, including the Association for Colleges, condemned them as “a distraction.”

The Government believes it has largely succeeded in shaking up the schools to produce improvements it wants and points to evidence of rising academic attainment.

Apart from renewed emphasis on basic skills through a network of literacy and numeracy centres, and other initiatives such as improved inspections, the paper turns the spotlight on further education.

Mrs Shephard spelled out a tough line on spending post-16, with FE style payment by results in school sixth-forms, a levelling of training costs - TECs are said to be cheaper than colleges - and further action to improve education and work-related training.

Ruth Gee, chief executive of the AFC, said: “Whenever FE is mentioned it is in the same breath as cuts. The skills audit shows clearly that more cash is needed, not less.”

The skills audit of comparisons between five leading nations is a centrepiece of the white paper. It suggests the UK is a leader in lifetime learning and higher education participation but comparatively poor at intermediate (GCSE and A-level) and job training, where Germany is the world leader.

Critics said there was a need for more cash, citing the recent report by the International Institute for Management Development which said Britain had slipped to 27th in the world league table for investment in education and training.

The rankings tally loosely with the latest OECD participation figures at 17, which show Belgium top (97.1 per cent) then Sweden (95.5 per cent), Japan (91.9), Finland (91.3), Germany (91.2). The UK is third from bottom with 57.3 per cent, Greece has 57 per cent. Mexico is bottom with 29.9 per cent.