Ministers want to improve skills along with economic development

Careers Scotland will join with learndirect Scotland, which helps people with skills and training.

But the STUC and opposition parties raised concern that a merger would not deliver the needed improvements.

Education Secretary Fiona Hyslop said the Scottish Government aimed to take forward skills policy in line with those on economic development.

The merger announcement coincided with the publication of a new strategy for skills.

Ms Hyslop said she expected a "shell" organisation to be set up by the start of 2008 and a more formalised body to be in place by next April.

Frontline staff

"This strategy sets out our objectives to develop a lifelong learning system centred upon the individual but responsive to employer needs," she said.

"It is important to make the link between this strategy and our policies on the economy. That is why we will take forward our skills development policies in close relationship with those on economic development, business improvement and innovation."

The new skills strategy was welcomed by the STUC and the Confederation of British Industry, which said it looked forward to turning it into action.

But the trades union congress claimed it did not believe the creation of "yet another quango" would deliver a better service.

"A careers service run by Scottish local authorities on a regional basis will, in our view, and the view of careers staff, improve the service and strengthen links with local government," said STUC Assistant Secretary Dave Moxham.

Conservative education spokesman Murdo Fraser said the new agency was "a step in the right direction", but fell short of what was required.