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The government has pledged to spend over £1billion to increase the number of places available on apprenticeship programmes.

Under plans announced today, ministers promised that wider funding would create more than seven million training places.

Proposals to boost the number of apprenticeships and training opportunities form part of a major investment programme which the Department for Innovation, Universities and Skills (DIUS) claims will improve the nation's job prospects.

The plans come amid growing concern about the inability of employers to recruit staff with the necessary skills they need for their businesses.

A report published today by the Confederation of British Industry (CBI) and accountancy firm KPMG highlights the particular problem businesses in London are having meeting their skills needs.

Two out of three (65 per cent) firms in the capital expect to face skills shortages over the next six months and 58 per cent are already recruiting overseas to plug the gaps, according to the results of a poll released by the organisations.

As part of the government proposals announced today, ministers plan to boost the number of places on apprenticeship schemes from 250,000 to more than 400,000 by 2010/11.

By that date, total DIUS funding for spending on adult skills and apprenticeships through the Learning and Skills Council (LSC) will increase to £4.3 billion a year. The department says the level of funding will represent an increase of 17 per cent in spending on adult learning.

Announcing the plans, skills secretary John Denham said: "Today's announcement amounts to a kick-start of the government's drive to put Britain in the premier league for skills.

"This work will help ensure the future economic competitiveness of the country. It will raise aspirations, improve life chances and strengthen our families and communities."

But shadow secretary of state David Willetts stressed the reluctance of employers to take on apprentices was the key barrier to expanding the number of apprenticeships available.

"They are put off by the costs and the bureaucracy but there is nothing in this announcement to tackle that problem," he said.