Unemployment is rising as the first recession in the UK since 1991 continues to bite. Many economists now predict it will go above three million next year.
Prime Minister Gordon Brown told the Commons it was a "matter of personal regret" for him that people were losing their jobs.
"That is why we'll do everything we can to help people get back to work," he said.
Mr Brown added that rising unemployment was a global problem which remained higher in many other countries.
Conservative leader David Cameron countered that the Labour government was to blame for the rise in unemployment.
"You've led us to this point without the hint of an apology and the British people will never forget it," he said.
"This is another milestone in the return of mass unemployment to the UK, and it will get worse before it gets better as unemployment always persists even after a recovery starts," said TUC general secretary Brendan Barber.
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