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Care homes, local authorities and hotels will be offered up to £2,500 for each unemployed young adult they take on.

Alistair Darling signalled that the jobless queue would top three million by the end of next year but said he was determined to stop the recession claiming a “lost generation”.

Announcing a £3 billion jobs package, he said that without help the young could be “abandoned to a future on the scrapheap”.

About half the money will be spent on a future job fund to meet a guarantee to provide work or training for jobless young adults.

Officials said that some of the cash would be spent offering “recruitment subsidies” for companies to take on 18 to 24-year-olds who have been out of work for more than 12 months. It is understood that the taxpayer could also pay up to £8,000 a year in wage subsidies.

Altogether, the Government hopes to create 250,000 jobs over the next two years.

However, that Mr Darling had to find additional cash to rescue a previously announced welfare-to-work programme has raised doubts. The £1.7 billion that was earmarked to help Jobcentres to cope with the influx of new claimants will also be used to save the existing flexible new deal scheme, under which companies are paid to find work for older long-term unemployed adults.

A senior official told The Times that part of the cash would be used to offer more generous contracts to companies that had threatened to pull out of the scheme earlier this year.

Employers would receive a 20 per cent up-front payment on hiring a long-term unemployed claimant and receive the remaining amount only when the new worker was settled.

However, according to one official, ministers are expected to announce within weeks that some companies could receive the full amount even if claimants are only “job-ready”,

A spokesman for the Department for Work and Pensions admitted that the costing of the scheme had changed as the jobless queues lengthened. Officials said that some of the money would be spent taking on new staff to deal with the rising number of benefit claimants.

Mr Darling said that most people, even now, continued to find work within a matter of weeks. It was important, he said, to stop a period of temporary unemployment “decoupling” young people from the labour market.

From January everyone under the age of 25 who has been out of work for a year will be offered a job or a place in training. Those in training will receive additional money on top of their benefits.

David Frost, of the British Chambers of Commerce, doubted that the changes would have a significant impact. “The outlook is bleak and we still expect a peak of some 3.2 million unemployed next year. It is doubtful that the measures announced today, however welcome, will alleviate significantly the situation.”

The Parkinson’s Disease Society voiced concern that the extra money for employment support was focused on those receiving long-term allowances, claiming there was “no reference” to people with disabilities.

Steve Ford, the chief executive, said: “Over the past six months the society has had an increase in calls to its helpline from people at risk of redundancy — evidence that people with disabilities and conditions like Parkinson’s are among the most at-risk groups. These people are being offered nothing by this Budget.”

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