Unemployment reached a 17-year high today, sparking warnings of continued job cuts next year.

Union leaders called the new jobless total of 2.64 million "shocking" and pressed the Government to take urgent action to stem the flow of job cuts, which continued today with news of more than 600 redundancies at travel giant Thomas Cook.

Employment Minister Chris Grayling maintained there were signs that the labour market was stabilising, while the Prime Minister insisted boosting the private sector was the only way to tackle unemployment despite figures showing that employment in private firms rose by just 5,000 in the third quarter of the year compared with 67,000 cuts in the public sector.

Business leaders said firms were reluctant to hire new staff and joined calls for action to stem the trend of rising unemployment, especially among the young.

The unemployment rate is now 8.3%, up 0.4% on the quarter - the highest since 1996 - while the jobless total is now worse than at any time since 1994 after an increase of 128,000 in the three months to October.

Unemployment among 16 to 24-year-olds increased by 54,000 to 1.03 million, the highest since records began in 1992.

The Office for National Statistics also reported that women's unemployment increased by 45,000 to 1.1 million, the highest figure since 1988.

The number of people out of work for longer than a year rose by 19,000 in the latest quarter to 868,000, the worst figure since 1996.

Jobseeker's allowance claimants increased by 3,000 last month to 1.6 million, the ninth consecutive monthly rise and the highest total since the start of 2010.

The number of job vacancies fell by 8,000 to 455,000, while 161,000 people were made redundant in the three months to October, down by 1,000 on the previous quarter.

The number of economically-inactive people, including students, those on long-term sick leave, looking after a relative, or who have given up looking for a job, fell by 54,000 to 9.33 million.

Answering questions in the Commons, David Cameron said all job losses were "bad news" and a "tragedy for those involved".

But he said whichever party was in power would be cutting public spending, and denied that his policies were "betraying a whole generation of young people", adding: "The absolute key to all this is getting our economy moving."

He insisted the private sector had created 581,000 jobs since the coalition came to power, while 336,000 had been lost in the public sector. But he admitted it needed to grow "even faster".

"The reason that unemployment is going up is because we are losing jobs in the public sector and we are not making them fast enough in the private sector," he added.

Labour leader Ed Miliband said: "He cannot deny that the central economic claim that he made, that the private sector would fill the gap left by the public sector, has not been met. He has broken his promise."

Bob Crow, leader of the Rail Maritime and Transport union, said: "These shocking figures show that all the Government's promises on jobs and apprenticeships are as hollow as a chocolate Father Christmas."

TUC general secretary Brendan Barber said: "No amount of spin can put a gloss on these terrible figures. Worryingly, the latest rise in job losses looks less like a bad blip and more like a trend of entrenched high unemployment, with new records being set each month for the number of women and young people out of work."

Graeme Leach, chief economist at the Institute of Directors, said: "This is another grim month for jobs, with private sector companies still reluctant to hire.

"Young people are suffering the most, with more than one in five out of work. The ongoing failure to resolve the euro crisis is likely to mean that unemployment rises still further over the winter. Many businesses are still watching and waiting."

John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development, said: "These pre-festive season jobs figures are so bad even Santa's elves will be feeling insecure.

"The hope that private sector job creation would offset large-scale public sector job cuts even in the short run has proved false and unemployment will continue to climb throughout 2012, regardless of what happens in the eurozone."

Thomas Cook will close 200 loss-making stores over the next two years as their leases expire - 125 more than previously announced - after completing a recent merger with the Co-op's high street travel arm.

Supermarket giant Morrisons announced some welcome good news by unveiling plans to create more than 7,000 jobs next year in 25 new stores.

:: Jobcentre staff on Merseyside are threatening strike action in a row over the transfer of staff to call centres, said the Public and Commercial Services Union.

Unemployment in the regions between August to October was:

Region / Total unemployed / Change on quarter / Unemployment rate

North East / 148,000 / plus 12,000 / 11.7%

North West / 301,000 / plus 19,000 / 8.7%

Yorkshire/Humber / 253,000 / plus 9,000 / 9.5%

East Midlands / 182,000 / minus 4,000 / 7.9%

West Midlands / 243,000 / plus 4,000 / 9.2%

East / 218,000 / plus 26,000 / 7.2%

London / 423,000 / plus 13,000 / 9.9%

South East / 272,000 / plus 16,000 / 6.1%

South West / 177,000 / plus 2,000 / 6.6%

Wales / 133,000 / plus 11,000 / 9.1%

Scotland / 229,000 / plus 25,000 / 8.5%

N Ireland / 60,000 / minus 4,000 / 6.9%