Immigration rules for foreign workers are to be relaxed under Budget measures in an effort to combat skill shortages in key industries.
The chancellor wants to boost UK science skills
The rules for highly skilled migrants are being changed to make it easier for younger applicants from abroad to work in the UK.
Under the new measures, overseas students on maths, technology, science and technology courses will be allowed to work in the UK for the year after they graduate.
And Gordon Brown said the home secretary would also be expanding the number of work permits available for industries like construction, which "face skills shortages".
The Liberal Democrats have welcomed the changes but the Conservatives say the moves are just the government trying to fiddle its asylum figures.
The chancellor said changes to the scheme which allows working holidays in the UK were also part of measures to attract foreign workers.
Mr Brown told MPs: "Expanding the skills we need requires not only new investment in training but a modern approach to the economic and social benefits of legal immigration."
David Blunkett is clearly intending to give work permits to people who would otherwise be seeking asylum
Shadow home secretary
Such an approach had proved vital to the past success of the American economy and was now doing the same in the UK, he said.
The UK already runs a 'highly skilled migrants' programme - which will now include a separate category for young people.
The changes would mean the achievements of applicants' partners would also be taken into account in the vetting process, said Mr Brown.
No targets are being set for the number of young workers the expanded scheme will attract.
But the Home Office says the programme as it stands saw 1,300 successful applications in the year after its start in January 2002.
Immigration Minister Beverley Hughes said: "Globalisation has meant mass migration has grown exponentially - 90m people pass through the UK each year as tourists or to work or study.
"It is neither practical, nor desirable to introduce a fortress Britain with all the damage that would do our position as a strong global economy.
"We have introduced tough reforms to reduce asylum claims.
"Alongside this we continue to welcome legal migrants to benefit our economy and improve productivity, growth and social cohesion."
The government has already announced that a new sector-based low-skilled migration programme, which will begin in May.
Both the hospitality and the food processing industries, where there are domestic skill shortages, will each have quotas of 10,000.
Conservative shadow home secretary Oliver Letwin was unimpressed by the moves.
He said: "We have beginning to discover how the home secretary intends to fulfil Tony Blair's pledge to reduce asylum applications by half by September.
"He is clearly intending to give work permits to people who would otherwise be seeking asylum.
"This is yet another case of a government that prefers to fiddle figures than to address the real problem."
Liberal Democrat home affairs spokesman Simon Hughes instead applauded the changes.
He said: "Widening the avenues for economic migrants to come to the UK will not only benefit the economy, it will help to take the pressure off the asylum system."