The strategy, which is the brainchild of Skills Secretary Peter Mandelson, promises that apprenticeships will become "ladders to university" from 2011.
The best apprentices will be eligible for 1,000 new scholarships worth £1,000 each, to encourage them to progress into higher education.
Skills quangos will also be cut back as part of the plans.
The Department for Business, Innovation and Skills (BIS) is to work with the UK Commission for Employment and Skills to reduce the "organisational clutter of public bodies delivering skills policy" by more than 30.
Mandelson said: "The skills system needs to mesh with our university system. We need schools and colleges to make a strong vocational offer, which leads to a clear vocational route from apprenticeship to technician to foundation degree and beyond."
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