Early school leavers to avoid jail

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The reform - hailed as one of the biggest in education for half a century - will be included in the first Queen's Speech of Gordon Brown's premiership on Tuesday.

Mr Balls said the legislation, which will raise the age to 17 by 2013 and 18 by 2015, will be backed by a "robust regime" of support and sanctions including spot fines and court action.

But while young people would have a "clear legal responsibility" to stay in education or training, there was no suggestion of using custodial sentences to enforce it.

The measure is part of a package of Bills the Prime Minister is hoping will counter a Tory resurgence and regain political ground lost over the decision not to call an early election.

Labour figures have urged him to use the Queen's Speech as a springboard to show voters his direction, amid warnings he was failing to get his message across to the public.

Several recent opinion polls have put Labour behind the Tories after a difficult month for the governing party over tax, immigration and the non-election.

Mr Balls, one of the PM's closest lieutenants, conceded on Friday that the Government had "made some mistakes" but said Labour remained "fundamentally united".

There will be few if any surprises in the Queen's Speech after Mr Brown broke with tradition by setting out his programme in July ahead of the monarch's formal announcement.

A 23-Bill programme will be dominated by three aimed at tackling the housing crisis, including the building of three million new homes by the end of the next decade.