failing to meet its targets, according to new figures released this week.
The scheme, credited with lifting applications for maths and science postgraduate certificate in education courses last year, appears to have lost its impact. Recruitment applications were down heavily in the first six weeks of this year's cycle.
Maths applications have slumped by 20 per cent compared to the same period in 1999, chemistry by 27 per cent and biology by 9 per cent. Only physics - already at rock bottom - is unchanged.
The extension of the pound;5,000 incentive to modern foreign languages has had no apparent effect - French and German PGCEs are down 22 and 21 per cent respectively, drops matched by English, history, geography, art, design and technology and information technology.
While primary PGCE courses are still oversubscribed, applications are down by a quarter - to less than half their level in 1994, according to the figures from the Graduate Teacher Training Registry.
The fall is entirely accounted for by the disappearance of mature applicants. However, there has been a slight rise in the numbers of 20 to 22-year-olds, according to analysis of the figures by recruitment expert John Howson.
The Teacher Training Agency and Department for Education and Employment said it was too early in the recruitment year to draw any conclusions. Figures could change weekly.
"Generally graduates are leaving their career choices until much later in the year," a TTA spokeswoman said. The DFEE said only one in seven secondary PGCE applications was made in the first six weeks last year, when an early 18 per cent fall ended with a 4.5 per cent rise.
But the drop is already alarming universities. Professor Mike Newby, chair of the Universities Council for the Education of Teachers, said the figures were "appalling". He added: "There is a deep-seated problem here that the Government must address and the golden hellos, helpful as they may have been, are clearly not making the impact the Government wants."
Mr Howson, of Education Data Surveys, said ministers should worry: last year's eventual rise was the result of the cash incentives. He suggested the planned literacy, numeracy and computer tests were creating a further barrier for students already worried about adding to their undergraduate debts with another year of unwaged study.
"They already know they'll have to pass all three tests to qualify but they have no idea what those tests are going to look like. They're shooting blind," he said.
But the news contrasts with reports of huge interest from older applicants in employment-based training. A 67-year-old man is among 3,000 people who in four months enquired about the paid route into maths and science teaching, according to the agency hired to oversee the MS600 scheme. Seventy have already been placed with schools.