Gordon Brown said he did not want the recession to herald a repeat of the "lost generation of the 1980s" as he welcomed a new employment scheme for young people.
Every young person who has been unemployed for at least six months will be guaranteed an offer of a job, training or work experience from today.
Employers and young people were invited to 10 Downing Street to meet ministers at a breakfast reception to mark the start of the scheme and to celebrate the Backing Young Britain campaign, which encourages employers to take on young people.
The Prime Minister said: "We do not want to have the lost generation of the 1980s."
According to the Government, the move will offer up to 470,000 opportunities over the next 15 months, benefiting almost 100,000 youngsters straight away.
Ministers said extra investment had already been critical to keeping unemployment 450,000 lower than anticipated in last April's Budget.
Projections of lower unemployment than expected could mean potential savings in benefit spending to 2014 of £10 billion, rising to £17 billion, said the Government.
The guarantee offers the chance of work through the £1 billion Future Jobs Fund, work-focused training, a place on a community task force, help with self-employment and internships.
If they do not take up the offer, young people's benefits will be affected.
Mr Brown said the "tough" offer of opportunities and responsibilities would help ensure people are skilled and qualified to take up jobs in the future.
He said: "90% of the jobs of the futue will need some sort of skill. Backing Young Britain is bringing everybody together for this central purpose - to give every young person the chance and opportunity to make the most of their talents, even in a fragile economy."
Of the guarantee, he added: "It's a tough set of opportunities and responsibilities we are offering today.
"We have found the finance even in difficult times to make this possible.
"It's a signal of how committed we are to making sure we have a generation of trained young people ready to work."
Work and Pensions Secretary Yvette Cooper, who also chatted to the young guests along with Business Secretary Lord Mandelson, said: "The extra investment has already been critical to keeping unemployment 450,000 lower than expected, but despite the latest welcome fall in unemployment, now is the time to increase help, not cut it back.
"We need to make sure young people do not suffer the scarring effects of long-term unemployment.
"That's why this guarantee is starting now, as the school leavers and graduates of last summer who couldn't find work because of the recession start to approach six months unemployment."
As part of the guarantee, all young people will be given access to a named Jobcentre Plus personal adviser.
Lord Mandelson said: "Young people have been at the centre of Government's response to unemployment and the recession, but we must not be complacent.
"Our support is an investment in our future as we build a stronger Britain."
Frances Revel is spending a year working for IBM in London between her second and third years of a marketing degree at Newcastle University.
The 21-year-old, who is from Morpeth, Northumberland, but currently lives in Peckham, south London, said: "It's very useful to be able to apply what you are learning to work, especially with such a vocational degree.
"You might find it hard to make that transition - if you've got a year under your belt it will help and it will look fantastic on my CV.
"I know a lot of young people who have just graduated who are finding it hard to get work because they didn't do any work experience or placements.
"They are talented people but it's difficult at the moment.
"That's why I'm trying to make the most of the opportunities I've got."
Mr Brown asked Miss Revel what she had learned about work from the internship and laughed as she jokingly replied: "It's hard, really long hours", before adding: "But it's rewarding."
IBM graduate and student manager Vanessa Gough said the company had not cut back on internships as a result of the recession and added: "I don't think we could run our business without them."
Ms Gough, from Portsmouth, said young people were "terrific ambassadors" and helped with recruitment by showing that IBM did not just employ computer science and IT graduates.
The Prime Minister also met Raphael Blake, 18, from Lewisham, south east London, who works as a synchronisation apprentice at Sony as part of its Music 4 Good scheme.
He said he was involved with licensing music for television programmes including Coronation Street and EastEnders.
"I left college studying electronic engineering in June or July and I started this apprenticeship in November," he said. "I was looking at quite a few opportunities because I knew that university was not immediately for me.
"I came across Music 4 Good and it married my passion for music with getting experience."
Verity Taulbut celebrated her 19th birthday with the trip to Number 10.
She combines working with the elderly for Anchor Care with her studies.
Miss Taulbut, of Wokingham, Berkshire, said: "It's really exciting to be here.
"I think the scheme is a good idea. When you are young if you are out of work for quite a while it's quite a knock to people's confidence."
The teenager is studying for an International Baccalaureate at Henley College and works as a care assistant with elderly people in their own homes for about 12 hours a week at evenings and weekends.
She said: "I want to do biomedical engineering at university, looking at prosthetics and things like that, so I thought it would be a good idea to start here."
Her manager, Sue Weller, who lives near Epsom in Surrey, said: "We encourage young people to join us because it offers flexible working hours and it does fit in quite nicely with college."
For employers such as Anchor Care, care sector employers are offered a £1000 recruitment subsidy with free pre-employment training for every young people they recruit through a initiative called Care First Careers. Employers can find out more about Care First Careers and how to get the subsidy at www.jobcentreplus.gov.uk/carefirstcareers.