The assembly government is to abandon its target for slashing the numbers of Neets (young people not in employment, education or training), TES Cymru can reveal.
Officials have admitted that this year's target of ensuring that 93 per cent of 16 to 19-year-olds are not Neets - set out in the 2006 strategic plan Learning Country: vision into action - will be missed because of the state of the economy.
Instead, the government is now working on new targets that will be published later in the year.
"We are moving in the right direction, however, in light of recent economic challenges the targets set down . were ambitious," a spokeswoman said.
"While the target remains in place at the moment, work is ongoing to determine future targets and indicators."
A recent Office for National Statistics (ONS) survey suggested that the number of Neets in Wales had reached an all-time high of almost 13 per cent - more than 15,700 - in June last year.
Although the government officially measures its Neets' progress on its own statistics, which are due out in July, the ONS survey gives a good indication of the national situation.
The Assembly government is hoping the wider choice offered through the 14- 19 learning pathways will keep more young people in education for longer while schemes such as Pathways to Apprenticeships and the Young Recruits Programme will appeal to less academic school leavers.
There have also been a range of multi-million pound programmes to provide learners with key personal and employability skills.
An Assembly government spokeswoman said: "We are committed to moving away from a narrow focus on targets and to track a wider range of indicators instead, including participation in learning and the labour market."
But Conservative Paul Davies, shadow education minister, said: "The decision to move the goalposts is typical of the Assembly government's poverty of ambition for Wales. It is deeply concerning that the government is more concerned with lowering targets than addressing the real problems that are leading to such high levels of Neets."
Dr Howard Williamson, professor of European youth policy at the University of Glamorgan, said target-setting was "meaningless".
"We have to bite the bullet and admit that a lot of these young people can't be reinserted into the employment or education system," he said.
David Reynolds, professor of education at Plymouth University, said: "The main reason for the rise in Neets is that the education system in Wales is not generating enough talent. It's plateauing in terms of achievement and falling behind England."