Education minister Estelle Morris announced on Tuesday an overhaul of training in England with the creation of skills councils targeting specific sectors of the economy.

The government hopes the plan will shorten the current skills gap by developing expertise in key industries.

The current 73 national training organisations will be restructured, with only the most successful gaining the new status of skills councils next year. Ministers have decided on the move after concluding that most of them have failed to improve Britain's shortage of skills.

A review of the current system has concluded that 10 per cent of the national training organisations (NTOs) are small, poorly funded and lack focus.

A new £6 billion-a-year learning and skills council will also be created to co-ordinate all education for over 16-year-olds. The focus will be on developing a skilled workforce - one of Gordon Brown's key objectives for Labour's second term - to increase productivity and make Britain's employees more adaptable to a changing job market.

By focussing on the labour force ministers hope to address the core problem of older employees with poor skills training and difficulties with basic reading and writing.

It is also part of the government's wider target of achieving zero unemployment by matching people with the demand for jobs and skills in different parts of the country.

"There is a long tail of under-performing NTOs," said John Healey, the government minister leading the reforms. "The best of them do a very good job - but they are in a very small minority."