Unemployed single parents of teenage children will face a dramatic change in their circumstances in 14 months.

New government rules will force them to seek work whenever their youngest child is 12, if they want to be entitled to benefits.

Under the present welfare regime, single parents do not have to look for work to be entitled to benefits until their youngest child is 16 but that is due to change in October 2008, and in October 2010 the age is to fall further, from 12 to seven.

Peter Hain, the Secretary of State for Work and Pensions, unveiled the green paper on the next steps to full employment yesterday in the House of Commons but they had been signalled earlier by John Hutton, his predecessor in the department.

Mr Hain pledged wraparound childcare by 2010 and as part of the government's crusade on child poverty he hailed a new social contract, promoting the value of work for lone parents.

He said: "We know that children of lone parents not in work are over five times more likely to be in poverty than children of lone parents in full employment; and three times more likely to be in poverty than children of lone parents in part-time work.

"From October next year, lone parents with a youngest aged 12 and over will no longer be entitled to income support simply because they are a lone parent. Instead, supported by the new job opportunities made available by the local employment partnerships, they will be eligible to claim jobseeker's allowance where they would be expected to look for suitable work in return for personalised help and support.

"And because we are serious about tackling child poverty, we intend that this age will be reduced further to seven from October 2010, backed up by the local availability of high-quality wrap-around childcare," he added.

Mr Hain, who is an unlikely candidate to deliver such far-reaching changes to the welfare system, has had his hands tied by the Prime Minister, and David Freud, who recommended greater use of expertise across the private, public and voluntary sectors at both national and local level.

"Private and voluntary sector providers already play a crucial role in delivering programmes such as Employment Zones and the New Deal. And we intend to build on this.

"After some 12 months on jobseeker's allowance - or in some cases possibly even sooner - we will move customers to a specialist return-to-work provider who will offer an intensive outcome-focused service, funded on the basis of results."

The welfare revolution will not stop at lone parents but will be targeted at the three million people of working age who have been on benefit for over a year.

Promising a step change, he said: "We must reignite the jobs crusade that started in 1997 and renew the partnership between government, employers and individuals by focusing now on those who remain furthest from the labour market and whose potential is untapped.

"The lone parents and ethnic minority groups still without the right support to work; the 16 and 17-year-olds not in education, employment or training; and those remaining pockets of poverty and worklessness concentrated in some of our major cities yet often close to thriving labour markets and great prosperity," he added.

Chris Grayling, shadow work and pensions spokesman, made a scathing attack on the government's record.

Complaining that nothing had happened over the past year, he said: "The government has published yet another set of headlines to try to reassure people that ministers are trying hard to do something, while in the real world far too many people are being left behind in our society.

"After 10 years of broken promises we still have more than 750,000 lone parents on benefit. And we still have more people on incapacity benefit than in 1997," he insisted.