The money will be available as part of a Youth Contract scheme to tackle the “ticking time bomb” of teenagers who are not in education, employment or training – known as ‘Neets’.
Under the scheme, charities and businesses will be invited to bid for contracts worth up to £2,200 to take young people on.
They will receive an initial payment up front, and more money when the youngsters show progress.
The deputy prime minister said: “Sitting at home with nothing to do when you’re so young can knock the stuffing out of you for years.
“It is a tragedy for the young people involved – a ticking time bomb for the economy and our society as a whole.
“This problem isn’t new, but in the current economic climate we urgently need to step up efforts to ensure some of our most troubled teenagers have the skills, confidence and opportunities to succeed.”
At least 55,000 16 and 17-year -old ‘Neets’ who have no GCSEs at grades C or above are expected to benefit from the programme, which is due to be announced shortly.
The group were singled out after evidence suggesting that unemployment early on can have a permanent effect on earning potential.
By the age of 42, someone who has been frequently unemployed as a teenager is likely to earn 12 to 15 percent less than their peers, the Department for Education said.
The announcement comes less than a week after latest unemployment figures showed that the numbers of 16 to 24-year-olds not in work increased by 22,000 to 1.04 million in the three months to December.