The jobless total jumped by 27,000 in the three months to January to 2.53 million, the worst figure since 1994, while the number of 16 to 24-year-olds out of work increased by 30,000 to 974,000, the highest since records began in 1992.
The unemployment rate for young people rose by 0.8% to 20.6%, also a record high.
The number of people classed as economically inactive also increased - up by 43,000 to 9.33 million, including 2.3 million looking after a family.
The total claiming Jobseeker's Allowance fell by 10,200 last month to 1.45 million, the biggest reduction since last June.
Figures from the Office for National Statistics showed that male claimants fell by 17,500 - the 13th consecutive monthly fall - while female claimants increased by 7,300 - the eighth monthly rise in a row.
Other data revealed that the number of over-65s in work increased by 56,000 in the latest quarter to reach 900,000, the highest since records began in 1992.
There was also a record number of 50 to 64-year-olds in work - up by 25,000 to 7.3 million.
Meanwhile, the number of people in work increased by 32,000 to 29.16 million, the highest figure since last autumn.
Average earnings increased by 2.3% in the year to January, up by 0.5% on the previous month, mainly driven by bonus payments in the finance and business services sector.
Pay averaged £453 a week in January, including bonuses.
Public sector employment fell by 45,000 in the final quarter of 2010 to 6.2 million, even before the full impact of the Government's spending cuts started to take effect.
Local government employment slumped by 24,000, central government by 9,000 and Civil Service by 8,000, while employment in private firms increased by 77,000 to almost 23 million.
There were almost half a million job vacancies in the three months to February, up by 24,000 over the previous quarter, although that figure included 29,000 temporary jobs for this year's census.
The number of days lost through industrial disputes remains historically low at 9,000 in January, taking the total for the year to 371,000 compared with 451,000 in the previous 12 months.
Region / Total / Change / Unemployment
North East 129,000 / plus 5,000 / 10.2%
North West 263,000 / minus 16,000 / 7.7%
Yorkshire/Humber 246,000 / plus 2,000 / 9.3%
East Midlands 186,000 / minus 2,000 / 8.0%
West Midlands 265,000 / plus 27,000 / 9.9%
East 186,000 / minus 16,000 / 6.2%
London 392,000 / plus 16,000 / 9.4%
South East 282,000 / plus 6,000 / 6.3%
South West 169,000 / plus 16,000 / 6.3%
Wales 126,000 / plus 2,000 / 8.7%
Scotland 218,000 / minus 16,000 / 8.1%
Northern Ireland 67,000 / plus 4,000 / 8.0%
Employment Minister Chris Grayling said: "There is good news and bad news in these figures.
"There's been a welcome drop in the number of people on benefits, and the increase in full-time private sector jobs is a step in the right direction.
"But the rise in overall unemployment is a real concern and underlines the need to press ahead with policies which will further stimulate growth in the private sector.
"For those on benefits that are now looking to make the transition into the workplace our new Work Programme will provide tailored support to get them into jobs."
The Government's flagship new Work Programme will be in place by the summer and will offer personalised, tailored support to get people back into jobs.
John Salt, director of totaljobs.com, said: "With more cuts in the public sector, this rise doesn't, unfortunately, come as a huge surprise and is in line with our prediction that unemployment won't peak until late in the third quarter of 2011.
"Private sector recovery has, however, been more sluggish than expected. Sectors which had previously been key to job growth, such as retail, have been affected by a drop in consumer spending that comes in response to inflation and fear of an interest rate rise."
Martina Milburn, chief executive of youth charity The Prince's Trust, said: "Each month this year youth unemployment figures have reached record levels. Sadly Britain is breaking records for all the wrong reasons.
"We need to help young people back into work to strengthen the economy, communities and families."
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