The move, already being dubbed "rock-'n'-dole" by Whitehall insiders, will be announced today by the employment minister, Andrew Smith, at a meeting of the Music Industry Forum, the Government's taskforce on creativity, set up byChris Smith, the Secretary of State for Culture.
So, although Britain's biggest bands have failed to persuade Tony Blair to modify his new tax laws, which penalise them, the nation's aspiring musicians have been exempted from his New Deal which requires all 18- to 21-year-olds unemployed for six months or more to join a welfare- to-work scheme.
Instead, fledgling bands will receive career guidance from specially appointed local advisers who will help them to move from benefit into careers in the music business.
The government climbdown follows a torrent of criticism from Mr Blair's buddies in the music industry - criticism which has been damaging to new Labour's "Cool Britannia" image.
Alan McGee, a member of the the Music Industry Forum and owner of Creation Records, Oasis's label, claimed that the welfare-to-work scheme would rob Britain of potential rock superstars by denying them time to rehearse and establish their careers.
"Bands like Oasis make millions for this country in export sales and tax but they began like almost every other band, rehearsing hard and slogging up and down motorways in a Transit van to play gigs to half a dozen people," he said earlier this year. "If we want the benefits that music brings - the money, the cultural diversity, the respect from overseas - we have to allow the musicians to eat."
Mark Fisher, MP for Stoke-on-Trent Central and Labour's arts minister, spoke of the difficulty of introducing welfare reforms while nurturing creative talent.
He used as an example his step-son - lead singer with an emerging indie rock group called the Longpigs - who lived off unemployment benefit and government schemes for eight years while developing his music. He said: "There is undoubtedly a difficulty in that a lot of bands struggle for a long time and have benefited from being able to claim benefit."
Pulp frontman Jarvis Cocker was among a number of Cool Britannia figures who added to pressure on the Government's welfare policy by branding new Labour "very disappointing", and who attacked its benefits policy.
The singer said: "This is worse than if the Tories got in, because you would expect it from the Tories."
Mr Blair's change of heart will provoke one immediate question: how can youngsters claiming dole money and professing to be practising actually prove that they are serious about becoming musicians?
Mr Smith insists that the special exemption will only apply to unemployed youngsters who show "real commitment" and he wants the music industry to advise civil servants on how to spot genuine talent so help can be given.
Applicants will be expected to show a record of participation in school orchestras, plays or amateur dramatics.
It will not be long before Mr Blair, who used to play in a band called Ugly Rumours, is invited to a benefit gig.Reuse content