DAVID CAMERON was accused of planning to "exploit" jobless young people – after it emerged his work creation scheme will pay "benefits plus £1 an hour".

Mersey MP Angela Eagle, a minister at the Department for Work and Pensions, said the Conservatives' flagship “Youth Action for Work” programme would pay peanuts.

The Wallasey MP also warned that the scheme would undermine the minimum wage – which the Tories insisted they supported – and tempt employers to dump existing workers for cheap labour.

She said it was a pale shadow of the Government's own £1bn “Future Jobs Fund” which aimed to put 100,000 eighteen to 24-year-olds back to work, on the legal minimum of £5.80 an hour or higher.

In July, local authorities across Merseyside were given funding to put more than 6,000 jobless under-25s into work for at least six months, in a range of fields including apprenticeships, the Health Service, and working with children.

Ms Eagle said: "The Government is giving opportunities to young people, but David Cameron is just exploiting them.

"This scheme will undermine the principle of the minimum wage and ask young people to work for a wage on which they can't even hope to make ends meet.

"If there is a pay step below the minimum wage level, then employers will simply get their staff cheaper and lay off other workers."

The row blew up after the Conservatives used their Manchester conference to unveil "radical" back-to-work plans after warning: "Britain is in the grip of a jobs crisis."

Much of it focused on helping young people after six months of unemployment, including 200,000 extra apprenticeships, 100,000 additional FE college places and 100,000 "work pairings" with traders.