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.
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.
As part of the guarantee, all young people will be given access to a named Jobcentre Plus personal adviser.