Half of all 16-year-olds will receive up to £30 per week if they decide to stay at school, Charles Clarke has said.

The education secretary says such measures are necessary because Britain has one of the worst "staying on" rates in the world.

The money will be means tested and only those students whose household income is less than £30,000 will qualify.

Clarke said the scheme was dependent on attendance and described it as "earn as you learn".

The Liberal Democrats have dismissed the plans, arguing it remains more attractive for poor students to leave school and take the minimum wage.