Tony Blair joked with students during the official opening of a college in Darlington that cost £34.5m to build.
Tony Blair also paid a visit to a children's centre
The Prime Minister was accompanied by local MP Alan Milburn for his tour of the Central Park campus.
He chatted with students, and told those in the catering department that it reminded him of waiting tables while living in Paris in the early 70s.
Later, he read the story of the nativity to youngsters at the Wingate Sure Start Children's Centre.
Darlington College provides courses for 17,000 part and full-time students, and employs 600 staff.
Mr Blair toured the woodwork and brickwork classrooms, met catering and hospitality students, and was interviewed by would-be journalists in the media school.
He said the college was crucial to the development of the country's economy in face of competition from countries like India and China.
He added: "In Britain we have to continually transform our skills base.
What you are offering here are the skills of the future. In a very simple way, if what you do here works, Britain will become very prosperous.
"If as a country we are not moving forward, improving our skills base, we fall behind."