The unemployed face tougher sanctions if they fail to look for work, although benefits for those genuinely struggling could actually rise, under radical plans to adopt the “tough but tender” Danish welfare model to the UK.

James Purnell, work and pensions secretary, travelled to Copenhagen yesterday to see its “flexicurity” system in action, which has given Denmark the lowest unemployment rate in the EU and second lowest in the OECD.

The government is braced for the jobless total to creep above one million in the UK before long. Latest figures showed the claimant count at 904,000. Ministers are eager to see how countries with very low unemployment run their welfare systems and what can be learnt from them.

Denmark’s low jobless count is despite generous unemployment benefits which, for many, match their entire salary.

But in exchange for up to 28,278 Euros a year they all must enter an “activation” programme, drawn up individually for them by a highly skilled employment case worker. That may include compulsory retraining or work experience, or intensive intervention such as drug rehabilitation for others.

Although case workers attempt to negotiate and reach agreement with their unemployed “client” on the contract, they have the power to impose it if agreement cannot be reached. The agent also has powers to stop benefits if the claimant misses a single appointment, for example a job interview or meeting with a mental health counsellor. They also lose benefits if they give up two jobs in a year.

The system is in contrast to the UK’s top down approach where there are national rules on how often claimants need to be interviewed or go for job interviews, but Mr Purnell said he now wants to import the Danish model.

Denmark also has a far tougher regime for single mothers than the UK. They are treated no differently to parents in couples and are expected to rejoin the labour market with a full time job as soon as their year-long maternity leave is at an end. However they are given the guarantee to a full time place at nursery or wrap around school care for their children.

Mr Purnell said he was sure the individualised approach would work in the UK and is planning a white paper in the autumn. He also hinted that child care would be radically expanded. “One of the most attractive features is the personalised contract. It is negotiated and agreed and then its terms imposed. It is made clear to people that there is no choice but to work, although have a say in how they would like to go about it,” he told The Times.

“I don’t see why this could not be imported to the UK. We have also shown we will increase benefit levels. Tax credits have made a huge difference to lone parents both in and out of work, and the changes to Incapacity Benefit mean people who cannot work will be much better off. Of course one of the big differences between Denmark and the UK is childcare. They have a guaranteed place for all children until they start school. But look how far we have got in the last 10 years. The foundation is already there. We have got to focus on where we want to be in 10 years time.” He now plans to draw up a White Paper to introduce personal contracts by the autumn.

In the UK single mothers are currently able to stay on income support until their youngest child reaches 16. That will change shortly so they must look for work and come off benefits when their youngest child is seven.

However in Denmark this is considered a very strange approach with no advantages for either the mother, who will then struggle to get back to work, or the child, who would miss out on high quality nursery care.

Mr Purnell suggested there would be more reforms in that area too. “What we do there we will do in stages with the age dropping to seven over the next few years. That is not the end of the reforms,” he said.

Job centres in Denmark have to publish all their results, just like schools in the UK, and if they underperform risk being closed down and their work taken over by a neighbouring team. “I think that would make job centres self reforming. No-one wants to be bottom of the league table,” he said.

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