A "relentless drive" to improve basic skills in reading, writing and numeracy in England has been promised by the Education Secretary, Ruth Kelly.
Ruth Kelly and Tony Blair visited a south London training centre
"Too many young people are unattractive to employers, deficient in the basics of English and maths," she said.
Ms Kelly presented a White Paper which would require pupils to pass tests in "functional" literacy and numeracy.
There will also be vocational "specialised diplomas" in 14 subjects, such as engineering and health.
The education secretary, responding to the reforms to the exam system proposed by Sir Mike Tomlinson, had rejected calls to replace A-levels and GCSEs with a single diploma structure.
While this disappointed leading figures in the educational establishment, her announcement addressed complaints long made by employers and industry that pupils were leaving school without the basic skills needed for work.
"It is totally unacceptable that at least 70,000 16-year-olds a year are weak in the basics of reading, writing and arithmetic," said Ms Kelly.
review of 11-14 curriculum
no-one gets GCSE grade C maths or English without "functional" skills
GCSE maths reformed
GCSE coursework reviewed to reduce assessment
new "general" diploma for five GCSEs grades A*-C including English and maths
specialised diplomas in 14 subject areas, designed by employers' groups
extra, harder questions in A-level exams
universities to see A-level module grades
A-levels four exams not six
extended project instead of fourth or fifth AS-level
post-results university applications by 2010
"I want every young person to be competent in English and maths before leaving school or college."
Ms Kelly announced that pupils taking GCSE maths and English would have to pass a test in functional skills, such as writing a letter or working out their family budget.
Without passing this test they would not be able to gain a grade C in these exams.
Schools will also be under pressure to ensure that pupils acquire these basic skills - as exam league tables will be adapted to show how many pupils achieve the equivalent of five good GCSEs including maths and English.
At present, almost six out of 10 secondary school students would fail to meet this benchmark.
The education secretary promised that more space for catch-up lessons would be made within the curriculum from the age of 11 for "those children who fall behind" at English and maths.
'Second class, second best'
Ms Kelly also announced another attempt to give vocational qualifications more status, with specialised diplomas in 14 employment areas.
Complaining of a "second class, second best vocational education system", Ms Kelly promised to revitalise vocational training with industry-friendly qualifications which would have credibility with employers.
The first wave of diplomas - engineering, health, media and ICT - will be available by 2008, with further subjects to be introduced in the following seven years.
These would aim to be less confusing and more accessible than the previous 3,500 different vocational qualifications, said Ms Kelly. And an important difference would be the involvement of industry in how they would be structured.
A widening of workplace training is also central to another announcement, in which thousands of "disaffected" 14 to 16-year-olds would be able to spend part of the school week outside the classroom.
"I believe the key to re-motivating these teenagers is to broaden the range of places they can learn," she said.
The government is promising to "increase the capacity of the education system to offer vocational education" in both schools and colleges. But it is not saying how this is to be funded.
The education secretary also promised to tackle the "scandal" of the United Kingdom's poor record on teenagers dropping out of education and training - aiming an increase in the staying-on rate from 75% to 90% over the next decade.
Without formally changing the school-leaving age, Ms Kelly said that she wanted the age of 16 to cease to be the key age at which pupils decided the next phase of their education - and that GCSEs could be taken at 15, 16 or 17 years old.
Sir Mike Tomlinson has said he fears that the proposals will perpetuate, not end, the divide between academic and vocational studies.
The White Paper also stresses the need to stretch the most able pupils and to allow universities to differentiate between the brightest A-level students.
In the short term, admissions tutors will be given the individual unit results within A-levels, rather than just an overall grade.
By 2010, the government promises that the schools exam timetable and university admissions system would be changed to allow pupils to have their full A-level results before applying to university.
Ms Kelly said she expected universities would want to see "extended essays" by pupils, as evidence of their ability.
Shadow Education Secretary Tim Collins said the biggest disappointment was that Ms Kelly had not accepted the central Tomlinson recommendation for an over-arching diploma.
"How can you expect to achieve parity of esteem if one set gets A-levels and others get a diploma and there is no overlap between the two?"
Liberal Democrat education spokesman Phil Willis said ministers had "abandoned the fundamental principle" of making academic and vocational qualifications of equal value.