Employers are to be paid "golden hellos" of up to £2,500 for every person they recruit and train who has been out of work for more than six months, ministers will announce today.
The move is part of a £500 million package to support the long-term unemployed as the toll of jobless continues to rise.
The money will also go towards additional training places to equip people with new skills, as well as "intensive" support from JobCentre Plus advisors.
The emergency measures are to be unveiled at a jobs summit hosted by Prime Minister Gordon Brown this morning, bringing together major employers, unions and welfare experts.
They are the latest in a flurry of government initiatives to combat the recession and support the rising toll of jobless.
The measures, announced by Work and Pensions Secretary James Purnell, are the latest in a flurry of government initiatives to support those hit by the recession.
They are due to be rolled out in April, with the money to be spread over two years.
Plans are still being worked up to improve the flow of credit in the economy, including government guarantees for loans to businesses.
The Department of Business and Enterprise refused to comment on claims today that the scheme would be targeted at small businesses.
According to the Daily Telegraph, beleaguered car manufacturers were still in line for the taxpayer-backed loans, however, unlike most large firms.
The heads of the UK's biggest banks were yesterday invited to lunch at the Prime Minister's country retreat, Chequers, fuelling expectations that further measures to get them lending are imminent.
Lloyds TSB chief executive Eric Daniels and Barclays chairman Marcus Agius were among the guests, who were also joined by Chancellor Alistair Darling.
The latest aid plans are said to include official insurance for securitisations of mortgages and other loans, as suggested by former HBOS boss Sir James Crosby last year.
Mr Brown will insist today that failing to improve skills now would harm Britain in the future.
"For we say - invest to extend real help now to those who lose their jobs," he will tell the employment conference he is hosting in London.
"And my message is simple - we won't give up on you, but in turn you must not give up on work, on skills, and on training.
"So we must do everything we can to help those losing their jobs to find work again quickly or to get a new skill, to maximise the chances of the unemployed getting jobs from the 500,000 vacancies in the economy and what are 10,000 new vacancies every working day."
But Labour MP Frank Field said Mr Brown's efforts were being "completely undermined" by the Government's immigration policy.
"In one of the worst recessions in living memory, it is unbelievable that we allow non-EU economic immigrants to come to look for work, or to take up jobs for which British unemployed people have not had the chance to apply," the former welfare minister said.
He and Conservative MP Nicholas Soames have written to Mr Brown calling for employers to be prevented from bringing workers into the UK to fill jobs that British people cannot apply for.
"We urge you to review this work permit system so that British unemployed have a fi rst crack at all jobs that become available," they said.
The Federation of Small Businesses will today launch a blueprint for tackling unemployment with a five-point plan it said could create 400,000 new jobs.
The business group said more should be done to promote part-time working, investment in apprenticeships, simplifying legislation, giving small businesses more opportunities to bid for public contracts and cut in payroll taxes as a way of creating new employment.
The group said cutting the burden of regulation on business alone could create 160,000 new jobs and save 73,000 other jobs being lost through company closures.
Making it easier for small firms to win public procurement contracts would also help create work, the group argued.
Chairman John Wright said: "We are calling on the government to help small businesses to continue to invest in recruitment and training so they can grow stronger and more competitive, creating quality jobs and doing their bit to pull the UK out of recession as quickly as possible."
TUC general secretary Brendan Barber, who will attend today's summit, called for action on a number of fronts, including job creation programmes, better support for those facing redundancy, and improved access to training.
Greenpeace urged the government to scrap the controversial 2.5% cut in VAT and invest instead in a new generation of green collar jobs.
The environmental campaign group said 75,000 jobs could be created in tackling fuel poverty and energy efficiency which would also help to meet the UK's target on climate change.
Shadow work and pensions secretary Chris Grayling said: "With unemployment rising faster than anytime for a generation just holding a job summit is hardly going to solve the problems we face.
"Unfortunately all we are getting from the Government at the moment is a series of announcements on employment that are more spin than substance, and are just designed to cover up the fact that Gordon Brown's recession policies are not working."
David Frost, director-general of the British Chambers of Commerce, warned that the latest Government proposals would have only a limited impact.
"With unemployment rising fast and projected to rise by over a million, from what I am seeing companies are not recruiting so I am not sure at this stage in the economic cycle what the offer of a £2,500 grant to take on people is going to do," he told the BBC Radio 4 Today programme.
"We have got to focus on retaining those skills within the business because once they've gone they've gone."
Derek Simpson, joint general secretary of the Unite trade union, also urged the Government to do more to protect existing jobs in industries like motor manufacturing.
"We can't afford to lose these skilled jobs - they have to be supported. The businesses are basically sound, It is a question that they have a cashflow problem," he told the Today programme.
"The Government needs to step in to ensure that these particularly skilled jobs are not lost because once lost they will never return."
CBI deputy director-general John Cridland said the main priority for the Government should be to restore the flow of bank lending to business.
"The main thing the Government has got to do is sort the credit crunch. They have got to help the banks get back into lending by using the national balance sheet to underwrite loans to the business community," he told the Today programme.
"Credit isn't going to be easy but at the moment it is the single biggest reason why unemployment is rising because, if companies don't have the working capital to pay wages, they have to lay people off when demand goes down."