By Daniel Hunter

A new project launched by Nick Clegg will see firms and charities invited to bid for a payment-by-results scheme to try to get "Neet" teenagers into work or training.

The scheme, which will see £126 million invested in order to get 55,000 teenagers in England with poor qualifications who are currently not in education, employment or training into work, has already been slammed by Labour's doom and gloom merchants.

However, the deputy prime minister says it is about "getting them out of the living room, away from the telly and into the world of work".

Ahead of the formal launch, Mr Clegg described the problem of youth unemployment as a "ticking time bomb".

"Sitting at home with nothing to do when you're so young can knock the stuffing out of you for years," said Mr Clegg.

"We urgently need to step up efforts to ensure some of our most troubled teenagers have the skills, confidence and opportunities to succeed.

"Many of them will have complex problems: truancy, teenage pregnancy, a lack of GCSEs and health problems."

The scheme will form part of the Youth Contract, and will see contracts, worth up to £2,200 for every teenager sustained in work, education or training for 12 months.

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