The Prime Minister has admitted that rising unemployment is a "huge concern" as new figures showed the jobless total increasing to 2.5 million, with a record number of young people out of work.
Union leaders and opposition politicians voiced anger at the revelation that one in five 16 to 24-year-olds were jobless after an increase of 32,000 in the quarter to November to 951,000, the highest figure since records began in 1992.
Employment levels have fallen, redundancies have increased and the number of people classed as economically inactive has reached 9.3 million, grim figures from the Office for National Statistics showed, although there was a 4,100 fall in the number of people claiming Jobseeker's Allowance last month to 1.46 million.
Thousands more council jobs were earmarked for the axe because of Government spending cuts, taking the total to over 125,000, according to the GMB union.
Labour leader Ed Miliband accused David Cameron at Prime Minister's Questions of "complacency" over the 49,000 increase in unemployment, saying: "The truth is you are cutting too far and too fast and it is British people who are paying the price."
Mr Cameron replied: "Every increase in unemployment is a matter for huge concern and that is why we are launching the biggest back-to-work programme that this country has ever seen in the Work Programme.
"What I would say about the figures today, of course there were some very disappointing figures, particularly on youth unemployment ... but there are some mixed pictures because the claimant count has gone down for the third month in a row, the number of vacancies is up and also the average of independent forecasters published today see growth revised upwards.
"The biggest task for this Government and frankly for this country is to get to grips with the long-term structural problem of youth unemployment that has been going up for years in our country, and that went up by 40% under Labour."
The unemployment rate is now 7.9%, but for 16 to 24-year-olds it is 20.3%. The number of people who have taken retirement before reaching 65 increased by 39,000 to 1.56 million, the highest figure since records began in 1993.
Employment fell by 69,000 to 29 million, the biggest drop since the summer of 2009.
