The New Deal is a promise made and it is now a promise kept

Tony Blair

The 250,000 target had been one of five key manifesto pledges made by Labour during the 1997 general election campaign.

But the Conservatives say Labour is underplaying the cost of a scheme they believe was unnecessary in the first place.

Mr Blair hailed it as one of the government's "proudest achievements".

"The New Deal is a promise made and it is now a promise kept.

"I believe passionately that the New Deal offered many young people real hope and real opportunity.

"For many of those who have taken part in it, the New Deal has literally transformed their lives."

Focus on fraud

Mr Blair said the New Deal would now focus on helping lone parents, the disabled and the long term unemployed to find work.

Mr Blair also said steps would be taken to crack down on benefit fraud.

From next April, a new "two strikes and you're out" rule will be introduced.

Anyone who is found guilty of defrauding the system on two occasions will have their benefit stopped.

The New Deal has cost the nation as much as the Millennium Dome

Graham Brady

At the same time, the Department of Social Security will be given new powers to access the bank accounts of individuals who are suspected of defrauding the system.

However, the New Deal has been strongly criticised by the Tories.

They say the cost of finding work under the scheme is �20,000 for each unemployed person, while the government says it is around �4,000.

"The New Deal has cost the nation as much as the Millennium Dome but has been an even bigger flop," said Conservative spokesman on employment Graham Brady.

"Labour introduced New Deal at great expense to the nation and at a time when long-term youth unemployment was already falling at a rapid rate," he said.

The Tory alternative

And shadow employment secretary Theresa May said the Tories would introduce a new scheme called "Britain Works" if elected.

"'Britain Works' will address the failings of Labour's New Deal by getting people ready for jobs; getting people into jobs and helping to keep them there and will cost �400m less than the failing New Deal."

Young targetted

The New Deal had targeted people aged between 18 and 24 who had been out of work for at least six months.

Employers are given a weekly subsidy for taking on a young person and receive �750 towards the cost of training them on at least one day a week for six months.

But one in four youngsters are placed in jobs which end after 13 weeks, and those who turn down work face having their benefits cut.

More than 79,000 companies have signed up to support the New Deal and since it was extended to cover the older unemployed, lone parents and the disabled, more than 5,000 people over the age of 50 have also been helped into work.

Initially funded by a windfall tax on the privatised utilities, the government has pledged to spend �3.5bn on the programme over four years.