SCOTLAND'S youth unemployment crisis is to be tackled by a dedicated Government Minister for Youth Employment armed with an additional budget of £30 million to help young people into training, work or education.

The appointment was announced by First Minister Alex Salmond at Holyrood yesterday, minutes after Labour leader Iain Gray had called for it.

The new minister, who will have a salary of £81,449 including their MSP's pay, will be announced on Tuesday and will be an addition to Mr Salmond's team.

Unemployment among 16 to 24-year-olds in Scotland has reached 100,000 and last week business leaders in the Smith Group, which includes entrepreneurs Sir Tom Hunter, Willie Haughey and Jim McColl, also called for a dedicated minister to help young people find work. They warned there would be "enormous" costs to society if disaffected 16 to19-year-olds were ignored.

Lord Smith said he was "absolutely delighted" the new ministerial position was being created. He added: "One of the key challenges facing society today, especially in the current difficult economic climate, is ensuring we provide and promote much-needed job and career opportunities for our young adults."

Mr Salmond told MSPs: "We face unprecedented economic challenges and we know that more needs to be done. And this Government's key commitment is to those young people who yearn to be productive. No young person should go through school only to become an unemployment statistic at the age of 16."

He said Finance Secretary John Swinney would be having talks with local authorities, voluntary organisations, colleges and private sector employers about how the new funding could be best used.

Mr Salmond said the Government had already made an explicit commitment to 16 to 19-year-olds that if they were not already in work, education or training they would be offered a place in learning or training through the Opportunities for All scheme.

He added: "We are again demonstrating this commitment to young people and to growing the Scottish economy still further by ensuring that not a single school leaver falls through the cracks and has the chance to make the most of their potential."

Mr Gray said: "Alex Salmond seems finally to get the point the SNP Government has not done enough to tackle youth unemployment.

"Youth unemployment has doubled under the SNP since 2007 and there are now more than 100,000 young Scots out of work and the rate is the highest in the UK. The SNP has to realise it is time for an emergency response.

"This is a national crisis, a crisis for Scotland, because of the profound threat it poses to the future prosperity, future equality and future fairness of our society."

Mr Gray said the Government should expand the Community Jobs Fund to the private sector and he called on Mr Salmond to adopt a Labour proposal for a Procurement Bill to ensure all public sector contracts created jobs and apprenticeships for young people.

Mr Salmond told him linking contracts and procurement to an apprenticeship or training scheme would be reinforced in legislation coming before Parliament.

The National Union of Students said Mr Salmond's announcement was "great news". Its president, Robin Parker, said: "Lots of young people across Scotland, whether school leavers, or college or university graduates, are very worried about their futures and we look forward to working with the new minister."

Early speculation for the minister's job suggested a newcomer, the former Renfrewshire Council leader Derek MacKay, currently the SNP's business convener. Other potential candidates included junior ministers Michael Matheson or Angela Constance, who are regarded as making a success of their present jobs, with another MSP promoted to take their place.