A plan by Jeremy Corbyn to pay 16-year-olds a "living wage" of £10 an hour could prevent young people from getting onto the jobs ladder and lead to companies employing fewer workers, business groups have warned.

The British Chambers of Commerce said that hiking the wage paid to teenagers could "price them out of the workplace". The Adam Smith Institute, a free market think-tank, warned that the move could lead to businesses opting for older workers rather than "younger, riskier hires", adding that it could also drive up the costs of groceries as supermarkets face higher wage bills.

The warnings came after Mr Corbyn told a union conference that Labour's manifesto policy to introduce a £10 an hour living wage paid to adults "should apply to all workers" - signalling a rise of almost 150 per cent for 16 and 17-year-olds.

The minimum wage starts at the school leaving age of 16. But currently under-18s only have to be paid £4.05 an hour, compared to the £7.50 living wage that is applied to those aged 25 and over.

Labour pledged in its election manifesto to raise the minimum wage for all workers aged 18 and over to bring it into line with the living wage, which is based on the amount an individual needs to cover the basic costs of living. It is expected to be at least £10 per hour by 2020.