Gordon Brown insisted today that Government policy for tackling the economic downturn was the only way forward as new measures were unveiled to help the long-term unemployed.

Mr Brown said the Government was leading the world in its policies for dealing with the global downturn.

"We have got a plan. It is pretty straightforward what we are trying to do. When the markets and private sector fail, and cannot invest properly in the economy, the only person that can is us, the Government," he told GMTV.

"We are investing in the economy so that we can actually build up the economic activity, keep people in jobs, create more jobs and of course stop people being repossessed in their homes.

"There is no other way and those countries around the world are following what we have been doing because we are ahead of them in sorting out the banking system and now trying to get the economy moving."

Ministers will announce today that employers are to be paid "golden hellos" of up to £2,500 for every person they recruit and train who has been out of work for more than six months.

The move is part of a £500 million package to support the long-term unemployed as the toll of jobless continues to rise.

The money will also go towards additional training places to equip people with new skills, as well as "intensive" support from JobCentre Plus advisers.

The emergency measures are to be unveiled at a jobs summit hosted by Mr Brown this morning, bringing together major employers, unions and welfare experts.

Mr Brown was questioned on GMTV by job seekers Diane Baldwin, 44, who is a mother of two and a former Woolworths employee who lost her job following the collapse of the retail chain, and Hugh Hine, from Worcester.

Asked whether it was worth training for jobs in the retail sector, Mr Brown said Morrisons would announce 5,000 jobs in the retail sector this morning.

Asked why the Government had bailed out the banking sector but not Woolworths, Mr Brown said the Government tried to save Woolworths but it was a "financially unviable" business.

He said: "Woolworths had a business model that wasn't working, it couldn't be saved. We looked at it very, very closely (to see) what we could do.

"The problem with a bank is that if you don't have someone who can take your savings and deposits and lend you money, then the whole financial system, the whole economy breaks down."

The measures to help the long-term unemployed are the latest in a flurry of Government initiatives to combat the recession and support the rising toll of jobless.

They are due to be rolled out in April, with the money to be spread over two years.

Plans are still being worked out to improve the flow of credit in the economy, including Government guarantees for loans to businesses.

The Department of Business and Enterprise refused to comment on claims today that the scheme would be targeted at small businesses.

According to the Daily Telegraph, beleaguered car manufacturers were still in line for the taxpayer-backed loans, unlike most large firms.

The heads of the UK's biggest banks were invited to lunch yesterday at the Prime Minister's country retreat, Chequers, fuelling expectations that further measures to get them lending are imminent.

Lloyds TSB chief executive Eric Daniels and Barclays chairman Marcus Agius were among the guests, who were also joined by Chancellor Alistair Darling.

The latest aid plans are said to include official insurance for securitisations of mortgages and other loans, as suggested by former HBOS boss Sir James Crosby last year.

Work and Pensions Secretary James Purnell said it was essential that the Government took action in the face of rising unemployment.

"Clearly we haven't reached the bottom and we know we are planning for a period when unemployment is likely to be rising," he told the BBC Radio 4 Today programme.

"This programme is carefully targeted at people being out of work for six months. The key thing is that we don't want to waste a generation of people exactly as happened in the past."

But Labour MP Frank Field said Mr Brown's efforts were being "completely undermined" by the Government's immigration policy.

"In one of the worst recessions in living memory, it is unbelievable that we allow non-EU economic immigrants to come to look for work, or to take up jobs for which British unemployed people have not had the chance to apply," the former welfare minister said.

He and Conservative MP Nicholas Soames have written to Mr Brown calling for employers to be prevented from bringing workers into the UK to fill jobs that British people cannot apply for.

"We urge you to review this work permit system so that British unemployed have a first crack at all jobs that become available," they said.

The Federation of Small Businesses will today launch a blueprint for tackling unemployment with a five-point plan it said could create 400,000 new jobs.

The business group said more should be done to promote part-time working, investment in apprenticeships, simplifying legislation, giving small businesses more opportunities to bid for public contracts and a cut in payroll taxes as a way of creating new employment.

The group said cutting the burden of regulation on business could create 160,000 new jobs and save 73,000 other jobs being lost through company closures.

Making it easier for small firms to win public procurement contracts would also help create work, the group argued.

Chairman John Wright said: "We are calling on the Government to help small businesses to continue to invest in recruitment and training so they can grow stronger and more competitive, creating quality jobs and doing their bit to pull the UK out of recession as quickly as possible."

TUC general secretary Brendan Barber, who will attend today's summit, called for action on a number of fronts, including job creation programmes, better support for those facing redundancy, and improved access to training.

Greenpeace urged the Government to scrap the controversial 2.5% cut in VAT and invest instead in a new generation of green-collar jobs.

The environmental campaign group said 75,000 jobs could be created in tackling fuel poverty and energy efficiency, which would also help to meet the UK's target on climate change.

Shadow work and pensions secretary Chris Grayling said: "With unemployment rising faster than any time for a generation, just holding a job summit is hardly going to solve the problems we face.

"Unfortunately, all we are getting from the Government at the moment is a series of announcements on employment that are more spin than substance, and are just designed to cover up the fact that Gordon Brown's recession policies are not working."