Top executives from National Power, British Telecom and consultants KPMG, told David Blunkett that the shortage of well-qualified graduates is the biggest single problem facing schools.
Speaking at a London conference, John Baker, chairman of National Power, said: "We need a teaching career structure and financial incentives to attract and keep quality. I see no alternative to the Government facing the need to adequately fund schools and the teaching profession. It is the single and most important thing to be got right for the long term."
Michael Fowle, a senior partner at consultants KPMG, echoed the message. He said: "I have no doubt that we have to understand in this country the importance of investing in teachers - the importance of recruiting the best."
John Steele, BT personnel director, said: "I'm deeply interested in how we can create career structures to attract the best graduates. We need a radical approach both on incentives and resources."
The conference, billed as a "business summit", was sponsored by the Department for Education and Employment and Business in the Community. It was called to test reaction to the Government's White Paper proposals.
Business in the Community is a charity which has been working closely with government. Prince Charles is its president. The DFEE hopes to hold meetings twice a year.
Mr Blunkett chose this meeting in the NatWest headquarters to announce a Pounds 1 million Government and industry initiative to pay for 50 homework and after-school centres.
These will be pilot projects. But Mr Blunkett said he hoped for schemes in half of all secondary schools and a quarter of primary schools by the year 2001.
The White Paper proposals were welcomed, although some questioned the lack of detailed costings.