Almost 40% of people out of work have been signing on for one year or more and the Paris-based Organisation of Economic Co-operation and Development (OECD) warned the upturn will not be strong enough to quickly solve the jobs crisis.

Its latest report on the economy warned: "The expected recovery is unlikely to be sufficiently vigorous to reabsorb rapidly the current high levels of unemployment."

Richard Bruton, Fine Gael's enterprise spokesman, said it showed the real crisis in Ireland was the lack of jobs.

"The depression as far as jobs are concerned is far from over," the TD said. "Over the four year depression in the Irish economy, 370,000 jobs will have been lost.

Mr Bruton added: "Against this background, the OECD rightly points to the need for strong measures to help people re-skill, get work experience and develop their capacity to search for jobs. However, the Government's feeble measures, which have put merely a few hundred workers on to work experience and job incentive schemes, is a wholly inadequate response."

The OECD warned there was a significant risk the temporary hike in unemployment would become structural, and discouraged job losers would grow permanently disconnected from the labour market.

It noted that the amount of long term unemployed on the Live Register had almost doubled to 38% in the last quarter of 2009.

The OECD welcomed benefits cuts imposed in the last Budget and warned they need to be reduced at the same rate as wages come down otherwise the reason to work will be lost.

The body also warned many of the construction jobs lost during the crisis are unlikely to come back in the recovery.