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School-leavers in the UK are "unable to function" in the workplace because they lack key literacy and numeracy skills, employers have warned.

More than half (52 per cent) of firms questioned in a survey for the Confederation of British Industry (CBI), said they were dissatisfied with the basic literacy of those leaving school.

An additional 50 per cent said they were unhappy with the basic maths skills demonstrated by young staff.

However the survey of more than 500 employers indicated that businesses do think school-leavers make the grade when it comes to IT skills. A substantial 92 per cent said they were satisfied with the computer skills demonstrated by youngsters ending their career in the classroom.

"Their fluency with iPods, mobiles and MySpace has translated well into the workplace, and often gives them an edge over their bosses," said CBI director general Richard Lambert.

But he stressed that employers were still having to give "technology-smart wiz kids" remedial training in basic maths and English skills due to their deficiencies in the key subjects.

Some 15 per cent of employers questioned in the survey said that had been forced to given young staff remedial training in maths, while a further 13 per cent had given training in basic literacy skills.

"Basic literacy and numeracy problems are a nightmare for business and for individuals, so we have to get these essentials right," commented Mr Lambert.

"Progress has been made, but it is nowhere near enough, especially considering the massive investment made in education," the CBI chief added.

The publication of the research follows the release of official education results last week, showing a drop in the number of 14-year-olds meeting the required standards in national maths and writing tests.

Speaking to the BBC yesterday, skills secretary John Denham acknowledged that having a lack of basic skills was an "enormous problem" for the UK economy.

He stressed that concern about existing literacy and numeracy skills had underlined the government's plans to extend full-time education provision to the age of 18.