More than 110,000 "problem families" with disruptive youngsters will be targeted as part of a crackdown on knife crime, Gordon Brown has said.
They will get parenting supervision, with the worst 20,000 families facing eviction if they do not respond.
The prime minister, who backed more curfews for young people, aimed to make it "unacceptable" to carry a knife
Meanwhile the home secretary denied she wanted to make youngsters caught with knives visit stab victims in hospital.
Conservative leader David Cameron told BBC Radio 5 Live: "I'm completely baffled. Over the weekend we were told by the government that knife criminals were going to be taken to accident and emergency departments.
"It sounded like a gimmick... Now they [ministers] are in wholesale retreat."
Ms Smith insisted she had been talking at the weekend about "knife referral schemes" - where young people caught with knives would "face up to the consequences of their actions", including "graphic" weapons awareness workshops and visits to hospitals to talk to health workers to hear about the impact of knife wounds.
"We are not, and I have never said we are, proposing to bring young people into wards to see patients," she added.
The concept that you have been stabbed and you are in hospital and you are going to be visited by knife criminals - they haven't thought it through
Earlier Mr Brown used his monthly news conference to defend the government's plans for tackling knife crime in England and Wales.
Mr Brown said the measures would focus on "prevention, enforcement and punishment".
The prime minister also urged more councils to impose night-time curfews for teenagers "where there is a problem".
"What I want to see is anybody who is using a knife goes to prison. Anybody who is carrying a knife is subject to either prison or a strong community payback that forces them to give service to the community," he said.
Teenagers give their views on knife crime
"These are the types of sentences that young people must know will be applied against them. There is in all cases a presumption to prosecute."
He said stop and search powers would be increased, with more visible policing and 110,000 "problem" families with "disruptive young people" would be dealt with.
These are children who have either been excluded from school, been in trouble with the law or identified as likely to be in trouble later on, Mr Brown said.
Parents will be put on intensive courses to help them supervise their children.
There will be more "community pay back sentences", where young offenders have to "pay back for doing wrong", with communities choosing penalties such as cleaning streets on a Friday or Saturday night or clearing up graffiti.
Mr Brown said he also backed plans for a roll-out of curfews for children by councils trying to tackle anti-social behaviour.
According to the British Crime Survey (BCS), overall violent crime has decreased by 41% since a peak in 1995.
Knives are used in about 8% of violent incidents, according to the BCS, a level that has largely remained the same during the past decade.
The home secretary told MPs people caught carrying knives were now three times more likely to end up in custody - and to get a longer sentence.
But the BCS figures do not include under-16s, something which Ms Smith recently announced would change.
The government's measures, overseen by Alf Hitchcock who is deputy assistant commissioner for Scotland Yard, will focus on eight police areas including London, the West Midlands, Greater Manchester, Merseyside, Lancashire, Essex and the Thames Valley.
Mr Hitchcock told the Daily Mail a non-military version of national service could include helping vulnerable people and volunteering overseas.
He said most young people were not "beyond the pale" but had been "let down" and it was now time to give them the "hope they deserve" as well as a sense of "responsibility and achievement - and some discipline".
Conservative leader David Cameron said the measure was an example of "jumbled up ideas".
"The concept that you have been stabbed and you are in hospital and you are going to be visited by knife criminals - they haven't thought it through," he said.
Liberal Democrat home affairs spokesman Chris Huhne described Ms Smith's knife crime plans as "half-baked", and said the government had been in denial about the scale of the knife crime problem.
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