The education secretary Alan Johnson has confirmed the government is considering raising the school leaving age to 18.
Talks have been ongoing since Gordon Brown called for the move at the Labour Party Conference and press reports indicate that a green paper may appear in the spring.
Under the proposed timetable, the move would affect around 330,000 pupils who are currently 10-years-old and due to enter secondary education next year. It would be the first increase in school leaving age since 1972.
According to The Times pupils affected will be required to stay on at school, be in training or in an apprenticeship.
The move aims to lower youth unemployment as unskilled school leavers are finding it increasingly difficult to get jobs.
But the proposals cannot become reality until the education system’s capacity has been increased. Employers will also need to improve work-based training.
The proposal has received guarded support from business and teaching organisations.
David Frost, director general of the British Chambers of Commerce, said: “We support proposals to raise the age to which young people must be in compulsory education or training. It is imperative that we increase skills levels in our society if we are to remain a competitive economy in the face of continuing globalisation.
“However, the implementation of such changes will be absolutely critical. Large numbers of young people currently opt out of education or training at 16 – we do not want to see employers disadvantaged and disrupted by having to take on young people who simply don’t want to be in the workplace.”
Philip Parkin, general secretary of the Professional Association of Teachers, said: “PAT would welcome the inclusion of all 16 to 18 year olds in education or training. This would be a forward-thinking and historic move. We hope that all parts of the UK will work together on this.”
But he added: “There must be an appropriate curriculum, encompassing both academic and vocational qualifications and with parity between them.
“There must be support and motivation for young people to stay on in education or training. It should not be seen by the less motivated as some sort of conscription. There needs to be carrot rather than stick to avoid the image of a new compulsory and onerous National Service.”