A pound;100 million loyalty card scheme that attempted to bribe teenagers into attending school and college by offering them discounts on sportswear and CDs is being abandoned by ministers after research revealed that most pupils were ignoring it.

Beverley Hughes, children’s minister, said that the Connexions card had served its purpose as she announced its premature end.

Last month she admitted that the scheme, which allows young people to redeem rewards in return for points awarded for good attendance, had failed to meet the goals set when it was introduced in September 2001.

The minister told Parliament that studies in 2005 had shown “no evidence that the originally intended impact on increasing post-16 participation in further education and training is yet being achieved”. By the end of 2004 only 54,788 16 to 19-year-olds had used the cards, a fraction of the original goal of 1.7 million. Teenagers who use the cards, which offer discounts in certain shops, will be able to earn points until the end of August and will have until the end of February, 2007 to redeem them.

The Department for Education and Skills has already paid Capita pound;66.14m to operate the scheme. It is now in talks with the company to try to retrieve some of the remaining pound;41.48m still owed to it under the contract.

Research on the cards published last year, by York Consulting, revealed concerns that as early as September 2002, “awareness and usage by young people was low”.

By July 2004 only about 9 per cent of 16 to 19-year-olds were using the cards in any way, only 3.7 per cent had redeemed points and fewer than 1 per cent had redeemed five or more rewards.

Ms Hughes said the Government was now concentrating on the education maintenance allowance, a means-tested grant of up to pound;30 a week, to encourage those over 16 to stay on.

However, DfES figures released this month showed that since the grant was introduced nationally in 2004, the proportion of 16 to 18-year-olds not in education, employment or training increased from 10 per cent to 11 per cent or an estimated 220,000 at the end of last year.

A “youth opportunity card” scheme will be piloted from September in 10 local authorities for 13 to 19-year-olds, focusing on encouraging young people to spend free time in more constructive ways. The Government will top up the cards of disadvantaged 13 to 16-year-olds by either pound;12 or pound;25 a month depending on the pilot area.