THE prime minister is preparing crisis measures to support workers who lose their jobs in anticipation of an avalanche of new year redundancies.

Gordon Brown has called an emergency summit of cabinet colleagues, business leaders and trade unions to decide how to cope with the swelling army of the unemployed. Experts say that as many as one in 10 workers could be laid off if the government fails to kick-start the economy, pushing the level of unemployment above 3m. The government is preparing to:

¤ Pay firms to take on more apprentices than they need to meet current labour demands.
¤ Pour taxpayers’ money into creating “green” industries to generate jobs.
¤ Inject huge sums of infrastructure spending into the transport system.
¤ Offer emergency loans on a case-by-case basis to car makers that face collapse.

Downing Street also issued the strongest hint yet that it will press ahead with the third runway at Heathrow, despite environmental objections, citing it as an example of the government’s determination to modernise Britain’s transport infrastructure.

It comes amid mounting speculation that the Bank of England will announce a further interest rate cut this week – taking the figure to its lowest since the Bank was established in 1694. It has already cut interest rates dramatically since October, from 5% to 2%. Experts predict the rate will drop to 1.5% or less this week, with business calling for a full percentage point reduction.

Ministers are increasingly irritated by the behaviour of banks, which have been reining back lending despite tens of billions of pounds of taxpayer support. The Treasury confirmed that officials had been working on proposals to kick-start bank lending, but said no firm decisions had yet been taken.

A front runner is for the government to offer guarantees on the issue of new securities by the banks, which would enable them to tap into wholesale funding markets — in effect shut since August 2007.

While MPs do not return to work until January 12, Brown has summoned the cabinet for a meeting in Liverpool on Thursday to discuss how Britain can weather the storm. There is a darkening mood among ministers over the scale of the downturn, with senior figures talking in apocalyptic terms.

Brown will embark on a three-day regional tour of England and Wales, designed to reassure voters that he is not locked in the Downing Street “bunker” and understands the impact of the downturn on people.

No 10 is pinning its hopes of limiting the misery caused by widespread redundancies on persuading employers to recruit more trainees than they require. The scheme would create a “shadow” workforce with the skills and experience to get jobs elsewhere when the economy recovers. It will be the focus of a “jobs summit” to be held in Downing Street next week, bringing together leading employers from retail, manufacturing and other key industries.

Opposition politicians expressed scepticism about Brown’s flurry of activity.

“This smacks of increasing desperation by a government that said it had sorted things out – but its solutions are clearly not working,” said Chris Grayling, shadow work and pensions secretary.

Ministers are also expected to reopen talks with ailing car makers this week. Lord Mandelson, the business secretary, insists a US-style bailout of the industry would not be appropriate, but aides hinted at emergency credit for individual companies.

Brown has already said he will fast-track public projects to provide jobs. Critics say the £10 billion capital spending programme is a huge expansion of the public sector, but Brown’s aides said private contractors would carry out the work.

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