Key adviser Chris Humphries said that British workers' relatively low skill levels were a time-bomb that threatened the economy.
Mr Humphries, a former chairman of the national skills taskforce and now director-general of the City amp; Guilds, has called for all firms to have a licence to practise - that could stop them employing staff with inadequate qualifications.
Speaking at a Learning and Skills Development Agency conference in London on attracting new post-16 learners, he said that beneath the current prosperity, the country faced a time-bomb in the low level of skilled staff compared to its competitors - and the Treasury knew this.
"We have 15 per cent of the workforce without any qualifications and 20 per cent with only level 1. These are mainly in the 25 to 55 age group, but they are the people who will have to fill the new jobs created in skilled trades over the next few years and the Treasury figures show we are 800,000 people short."
A challenge of this size demanded a long-term, sustained strategy to attract back adults into learning. "Evangelising is a good thing but it simply doesn't work," he said. "Many of these adults have no skills and are highly reluctant learners with no confidence and often multiple learning problems."
Nor were yet more initiatives the answer, he said. "We have let 1,000 flowers bloom but pulled most of them out before they came to full flower."
He also said no more research - an "excuse" for inaction - was needed, as everyone knew what needed to be done.
Mr Humphries wants firms to be forced to use properly qualified staff. "This is a strong feature of the German system and we already have it in the road haulage industry and the health service. It is now a real live issue in the railway industry - do we want unqualified rail engineers to continue mending the tracks?"
He also called for reforms in the exam system with more flexible and modular learning, supported by a proper guidance service for adult learners and a workable system of recognising workers' existing skills and prior learning. "If we could get that right, we could steal a march on our competitors," he said. At the moment the exam system was over-regulated and was turning off young people from learning for life.
The conference saw the first appearance of Ivan Lewis as minister for adult learning. He admitted that participation in post-16 education and training had remained static over several years. More than 11 million adults did not hold a level 2 qualification, the minimum for a modern economy.
He promised to bring back a reformed system of individual learning accounts targeted at disadvantaged adults. The Government had started a pilot project of paid educational leave with financial incentives to companies to improve employees' skills.
The University for Industry now had 1,500 centres up and running. But reaching the basic skills target of 750,000 adults in tuition by 2004 would mean reaching out still further to new learners.