Gordon Brown will assert his Blairite credentials on welfare today by pledging to open up back-to-work schemes to the private sector and charities.
The Prime Minister is to signal his determination to use businesses and volunteers alongside state agencies as part of a "carrot and stick" approach to tackling unemployment.
To stop benefits becoming a way of life, would-be claimants will be forced to have a skills test, and then either matched with a job suited to their abilities or offered retraining.
Speaking alongside new Work and Pensions Secretary James Purnell at a conference in central London, Mr Brown will also announce a major expansion of apprenticeships.
And Skills Secretary John Denham will be on hand to outline moves to allow McDonald's and other firms to run A-levels in topics such as running burger restaurants.
The Premier is expected to say: "Every British unemployed and inactive man and women should have a skills check, and to make sure Britain raises its education and skills game to world class, James Purnell will intensify welfare reforms to include compulsion for the unemployed and many inactive men and women not just to seek work but to acquire skills."
He will add: "We will contract with new providers and incentivise them to find innovative ways of helping the long term unemployed and those outside the labour market to move into work.
"Reinforcing this personalised approach will be stronger rights and responsibilities for benefit claimants - new incentives for training but in return more compulsion to take up those opportunities.
"So if the unemployed don't train when given the opportunity it will affect their benefit entitlement."
Mr Brown will tell the event that there was a global "skills race", and the number of unskilled jobs in the UK would plummet.
To prevent young people moving on to welfare, one in five under-21s should be undertaking an apprenticeship within a decade.
Detailed measures will be unveiled in the coming days, including moves to encourage Government contractors to create training posts and subsidies for small businesses.
Mr Purnell said the Government had "a moral obligation" to look at innovative approaches to welfare.
Mr Purnell, who took over after Peter Hain resigned last week, told BBC1's Andrew Marr programme: "We are bringing in a major programme of reform...because a life lived without work is not a life fulfilled."
"We don't want the welfare system to become a way of life, that is the big difference between now and the way the system used to work," Mr Purnell said.
"The big reform which I want to bring is is to look at how we can use the private sector, the voluntary sector as well as the public sector to help people get into work because if they can bring in innovation, a new approach, it's our moral obligation to make sure we get the best service for people in that situation."