The Department for Education and Skills is proposing to raise the age for leaving education to 18.
Participation would include work-based learning, and vocational training. The initial proposal is to introduce the requirement for 17-year-olds in 2013. Young people who refuse to participate could be issued with a civil attendance order, which if breached, could lead to criminal proceedings.
Martina Milburn, chief executive of The Prince's Trust, said: "Giving a criminal record to teenagers who drop out of education will only force them into a downward spiral of unemployment and crime."
Bob Reitemeier, chief executive at The Children's Society, called the policy "shocking".
To support young people who are not in education, employment or training, the Chancellor announced the activity agreement pilot would be extended beyond 2008. This gives qualifying 16- and 17-year-olds a weekly allowance in return for participation in education or training.
