Employment minister and Epsom and Ewell MP, Chris Grayling, has said 200 businesses have expressed interest in his controversial work experience scheme, despite having to alter the way it worked last week.

Under the voluntary scheme, young people aged 16 to 24 continue to receive benefits whilst taking part in work placements with companies for between two and eight weeks.

Mr Grayling had previously announced that anyone withdrawing from the scheme would lose two weeks’ jobseeker’s allowance if they withdrew after the first week.

However after pressure from firms and charities involved in the scheme, participants will now only face benefit sanctions in instances of gross misconduct.

Mr Grayling said: "When I talk to young people about the problems they have getting into work I hear the same thing over and over.

"'I apply for jobs and am told I don’t have any experience but I can’t get any experience if I don’t have a job'."

"It’s a catch 22 for them. The Government came up with a plan to help with this. Get some of the biggest employers in the country to offer short term work experience to young people on benefits who volunteer to do it. Simple."

Businesses involved are believed to have expressed concerns at a meeting with Mr Grayling last week that negative media coverage of the Right to Work campaign and the branding of the scheme as ‘slave labour’ was damaging their reputation.

But Mr Grayling said that hasn’t stopped new businesses from signing up to the scheme.

He said: "Despite the persistent campaign of the last two weeks we have had contact with over 200 small or medium enterprises also wanting to get involved."

Mark Dunk, an unemployed activist at the Right to Work group, said: "This u-turn is a victory for our campaign. We can’t understand why the Government think it’s acceptable for people to work for less than the minimum wage."

Asked whether or not it was beneficial for individuals to get hands-on experience within a company with the prospect of future employment rather than being unemployed, Mr Dunk said: "That is a ridiculous thing to say."

Katja Hall, chief policy director of the Confederation of British Industry, which supports the scheme said: "Gaining hands on experience of the workplace is vital to giving young jobseekers a foot in the door.

"The work experience scheme’s record of getting people into jobs is very strong, with more than half coming off benefits after 13 weeks of starting a placement."