A £1bn government scheme to create jobs and work experience for unemployed young people is being launched today, with ministers saying it will ensure the country does not "lose a generation" to joblessness caused by the recession.

The future jobs fund is aimed at creating tens of thousands of jobs in sectors such as social care, education, tourism and sport. It also aims to create around 10,000 internships and work placement opportunities for 18 to 21-year-olds who have not been to university, as well as job clubs and a mentoring network.

The fund was announced by Alistair Darling in April's budget. Around £100m of the money was later earmarked to help businesses specifically tackling social or environmental issues to create jobs.

Among the measures launching this week is a website promoting 2,000 internships available to graduates, with another 4,000 to be advertised in the coming weeks.

"We are determined not to lose a generation of talent because of the recession," the work and pensions secretary, Yvette Cooper said. "Many young people were denied the help they needed in the recessions of the 80s and 90s, ending up out of work for months and years. Too many never got a start in the jobs market."

The fund would create 47,000 jobs, Cooper said. When the scheme was first announced, her department said its eventual aim was to bring 150,000 unemployed young people into work.

Young people's job prospects have been hit particularly hard by the downturn. Figures released in June showed there were 900,000 people aged 18-24 out of work, a rate of 16.6%, the highest for 15 years. This is expected to rise further as thousands of people leave schools, colleges and universities.

The future jobs fund is aimed mainly at those aged 18-24 who have been without work for a year or more. Organisations and companies can bid for funding, set at a maximum of £6,500 per person, to help create jobs lasting at least six months which can both be set up quickly and will improve local communities.

The Conservatives have criticised the plans as insufficient given the current scale of youth unemployment. John Wright, chairman of the Federation of Small Businesses, said the majority of his members would like to take on young trainees but tended to be put off by "the administration involved and the lack of financial support".