Tesco will offer paid placements with a guarantee of a job to all those people it will be taking on for work experience through a government scheme, after claims that it was using benefit claimants as unpaid labour led to a consumer backlash and in-store protests.

Tesco said the 1,500 unemployed people on jobcentre work experience schemes referred to the company over the next six months would now be given a choice of staying on benefits and completing the placement unpaid, or accepting a four-week paid placement with a guaranteed offer of a job at the end if the trial goes well.

Tesco said it was still signed up to the government's work experience scheme but would continue its dialogue with the Department for Work and Pensions (DWP) to make sure the scheme was voluntary and that no jobseeker was penalised for withdrawing from it.

Currently access to the scheme is voluntary, but if participants leave without "good reason" after the first week, they can lose two weeks' jobseeker's allowance. A Tesco spokesperson described the negotiations with the government as "constructive".

The move comes as Superdrug and the electronics retailer Maplin, along with the mental health charity Mind, said they were withdrawing from the work experience programme and similar schemes.

A Tesco supermarket in central London was forced to close on Saturday after it was invaded by members of the Right to Work campaign protesting against a job advert looking for permanent workers in exchange for expenses and jobseeker's allowance only.

Campaigners from the group said they planned to hold protests on Wednesday at a number of Tesco stores, including two in London and one in Kingston upon Thames.

Richard Brasher, chief executive of Tesco UK, said: "We know it is difficult for young people to give up benefits for a short-term placement with no permanent job at the end of it. So this guarantee that a job will be available, provided the placement is completed satisfactorily, should be a major confidence boost for young people wanting to enter work on a permanent basis."

He added: "Tesco committed 3,000 work placements under the government's work experience scheme. To date around 1,500 have been delivered. We will offer the choice of paid work and the jobs guarantee to all of the remaining placements we will deliver under the scheme. Three hundred young people undertaking work experience with Tesco have already found work with us and we are confident that many more will through this approach."

The DWP does not think Tesco's improved offer will mean the supermarket takes on fewer unemployed people. On Monday, Iain Duncan-Smith, the work and pensions secretary, had defended Tesco, saying it was caught in the crossfire of an undignified row, but on Tuesday DWP ministers said they were relaxed about Tesco's decision.

Chris Grayling, the employment minister, has insisted that no one is forced on to the work experience scheme and that the use of penalties is limited.

Grayling said the scheme, aimed at 18- to 24-year-olds who are unemployed for more than three months, had been over-subscribed. "So far, half the people who go through the scheme come off benefits very quickly afterwards and many stay with the company with which they had work experience," he said.

However, it is not clear yet from government figures if those who have come off benefits have done so because they have found a job.

Officials figures show that more than 34,000 young people have been on the work experience scheme. A further 24,000 have been referred to the government's mandatory work activity scheme, which lasts for four weeks and is unpaid.

"No payment goes to any employer. They do it entirely at their own expense and any induction or training is an investment funded by the employer," Grayling said.

He accused some organisations targeting the scheme of pushing their own political agenda. "There seems to be a culture among some of the pressure groups that hate big companies. Do they really want young people to get no work experience? There should be no division about trying to tackle youth unemployment," he said.