Up to 100,000 training places, jobs and work placements are to be created with a pound;300 million fund to tackle the youth unemployment crisis.
From April, 18- to 24-year-olds who have been out of work for six months will be compelled to accept a job or training place offered by Jobcentre Plus under the new Young Person's Guarantee.
At the moment, 495,000 under-25s are claiming Jobseeker's Allowance but the Department for Work and Pensions (DWP) estimates that less than 100,000 of them have been out of work for six months.
It is not known how much of the funding will be used for training rather than job creation, with the spokesman saying it would depend on individuals' needs.
Yvette Cooper, work and pensions secretary, said: "In the 1980s youth unemployment continued to rise for four years after the recession ended. A generation of talent was wasted. We are determined that it must never happen again, so we will guarantee a job, training or work experience at six months for 18- to 24-year-olds."
However, the Labour Force Survey puts the number of unemployed under-25s even higher at 750,000 - a record figure - raising concerns that some young people may be missed by the system.
Ian Brinkley, associate director at the Work Foundation, said the tide had turned for most of the economy, but young people were still struggling. "There is no recovery for the employment for young people," he said. "The under-25s were the first to feel the recession and there is no sign of a revival in their job prospects."
Officials had, in fact, expected the figures to be worse. The extra training places and jobs are being funded from savings made on the benefits bill because unemployment is lower than anticipated.
Paul Warner, director of employment and skills at the Association of Learning Providers, said it was not certain whether the funding would be enough to cover every 18- to 24-year-old.
"It does really only scratch the surface at the moment," he said. "As always, the devil is in the detail."
The creation of short-term, sixth-month jobs also undermined training providers, who were expected to help people into sustainable, long-term work, he said.
But he said some new provisions of the DWP white paper, Building Britain's Recovery, such as the creation of a "single purse" rather than funding welfare-to-work training through two departments, were welcome.
Businesses will also be encouraged to recruit young apprentices, with a pound;2,500 "golden handshake".
The budget for young apprentices was underspent last year, with employers reluctant to hire school leavers, instead overstretching adult apprenticeship funding as they put existing employees into training.
Iain Wright, minister for 14-19 reform, said: "Apprenticeships are a key route to building the national skills base, a fantastic way for young people to progress in the workplace and they make good business sense."