UNIVERSITY leavers who fail to find work at the end of their courses could be offered modestly-paid internships under a scheme being drawn up by skills minister and Southampton MP and John Denham.

The Government have already signed up four top firms, including Barclays and Microsoft, to take on graduates who would instead swell the growing ranks of the unemployed.

John Denham, the Innovation, Universities and Skills Secretary, revealed the proposals in an interview with national newspaper.

Plans for the national internship scheme come amid a worsening jobs market and increasingly challenging employment prospects for those leaving education. This summer will see one of the largest ever cohorts to leave higher education.

Itchen MP Mr Denham told the paper: "They will be a very big group; around 400,000. We can't just leave these people to fend for themselves."

However Mr Denham declined to comment on suggestions that the Government could bring forward plans to raise the school-leaving age to 18.

It is intended that internships will at least improve participants' skills and experience and may in some cases lead to full-time work.

Lasting for up to three months, they will be paid at a rate only slightly higher than undergraduates' income from grants and loans.

Mr Denham said: ''At the end, they will be more employable, and some of them will get jobs. Employers won't want to let good people go.

''These are the children of the baby-boomers. They will be a very big group. What do we do with them? We can't just leave people to fend for themselves.''

A new requirement for youngsters to remain in education or training until they are 18 only currently applies to those aged 11 or under this year.

Asked about the prospect for the change to be brought in immediately, to avoid additional pressures on the jobs market, Mr Denham said: ''Any steer would be unhelpful.''

David Blanchflower, an economist and member of the Bank of England's monetary policy committee said latest unemployment figures were ''scary''.

''We don't want these spells of unemployment to get long,'' he said.

''A spell of unemployment is bad when young and the longer it is, the worse it is.