Benefit sanctions for young people if they do not agree to undertake work experience schemes will be dropped, the government said today.

The U-turn comes after the schemes were criticised as "slave labour", and after Tesco and other major employers recommended the government drop sanctions.

Despite all evidence to the contrary, Employment minister Chris Grayling said it wasn't a climbdown.

"I have listened to our employers. I'm absolutely clear that we will continue to offer work experience to young people," he said. "We will continue to do so throughout the country, using Job Centre Plus's efforts to find employers who will find placements for young people and that we will continue to have a scheme which is proving very successful at getting young people into work."

He also continued his attack on socialists, who he believes form a tiny but vocal of minority of opposition to the programme:

"And for those who say that this is the real argument of the Trotskyists that the Prime Minister referred to. These are people who say that unpaid work experience for young people is wrong. It is denying them their right to work, and I say those people are completely wrong.

"They are misjudging, they are completely misguided in their view. This is an approach that gives young people their first opportunity in the workplace to demonstrate to an employer what they can do."

Earlier on Wednesday Nick Clegg accused critics of the government's work experience scheme of having "messed-up" priorities.

The deputy prime minister said critics should "think hard about what they are saying" before talking down a scheme that helps people get jobs.

"They are criticising a programme that is deliberately trying to help young people into work. I cannot for the life of me understand the kind of messed-up sense of priorities of people who want to prevent young people from finding opportunities to get into permanent work," he said.

Chief executive of Barnardo's Anne Marie Carrie, who attended today's meeting, told BBC Radio 4's World At One: "We discussed frankly what has gone wrong in public perception about this scheme.

"Work experience is a vital lifeline for some of the most disadvantaged young people in this country. They've been failed by the education system, they've been failed by the care system and they cannot easily find employment in this tough climate."

Following today's announcement, young people will be able to leave work experience programmes early without losing benefits, she said.

"Completely voluntarily, if they choose that it's not for them, then there will be no sanctions whatsoever," said Ms Carrie.

"That's what we've been pressing for for quite some time and I'm delighted that the Department has agreed that, actually, we were losing the benefits (of the scheme)."