Offering a tax-break for companies seconding staff to schools, Mr Brown said that businesses should support schools with management expertise.

"We must do more to encourage the ambitions of all our young people, not least by bringing the worlds of education and work closer together."

Gordon Brown says schools could benefit from business expertise

In his pre-Budget statement to the House of Commons, the Chancellor emphasised the goverment's commitment to "investment in education and innovation".

This included ensuring that scientific research would be developed to the country's economic advantage, which the Chancellor said would be backed by the creation of eight 'institutes of enterprise' in British universities.

These institutions would "complete the path that takes inventions from the science lab through to the national and global marketplace".

The Chancellor re-iterated that despite the economic downturn the government would still invest an extra £40bn in education and health over the next three years.

The extra £19bn for education is safeguarded

Investment in education, the Chancellor told the Commons, was vital to improving economic productivity and creating a society in which "no potential was neglected".

To ensure that Britain would be prepared for the "knowledge-based" industries of the future, Mr Brown repeated the government's promise to increase education spending by £19bn.

This "investment in educational reform sets out demanding targets for literacy, numeracy, teaching standards and qualifications", the Chancellor said.

The extra funds will also support the government's election pledges to reduce primary school class sizes, to fund the introduction of new technology to schools and efforts to encourage young people to stay in education and training.

"We have now made it possible for every young person after 16 to stay on in part-time or full-time education, to get qualifications and to have the opportunity of a job," said the Chancellor.

The extra investment promised by the Chancellor is planned to be introduced in three phases - £3bn next year, £6bn in 2000 and £10bn in 2001.

This would mean education spending rising by an average of 5.1% a year until the end of the parliament.

The Chancellor also promised that modernisation in the private finance initiative would mean introducing another £11bn in the public sector over the next three years.

This could mean "new investment in our infrastructure - in over 1,000 schools, in over 25 hospitals and in dozens of public transport projects".

In an attack on Mr Brown's "wonderland economics", Shadow Chancellor Francis Maude accused the government of appearing to be borrowing to invest in education and health, when it was really borrowing to finance social security spending.