Funding of ?12.8 million paid for around 8,500 placements in 2010-11, at a cost of ?1,600 per intern.

The report, published by Hefce today, says that around 31 per cent of participating graduates had been offered a long-term or permanent job by the employer, and 20 per cent reported that the scheme had helped them find other long-term employment.

Nearly half the interns said that the placement made them feel more confident in applying for future jobs, and 17 per cent were looking afterwards for another internship.

However, 14 per cent said they felt they had been a ¡°cheap pair of hands¡± and one in 20 was put off a career in the sector they experienced.

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Graduate intern schemes were run by 55 ÖйúAƬ institutions, which were given ?1,600 to spend on each intern.

Most used around three quarters of this money to pay the intern, although the majority of employers had to add to this ¨C yet 5 per cent of interns claimed afterwards not to have been paid at all, or to have received expenses only.

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The rest of the ?1,600 was usually used to fund the administrative costs to the university of college.

Three quarters of the employers involved in the scheme had not offered an internship before, and 81 per cent had fewer than 50 employees.

The report, Increasing opportunities for high quality ÖйúAƬ work experience, says that instiutions were ¡°very positive¡± about the scheme as it helped them to find their graduates employment.

But half of those that participated said that they ¡°definitely¡± could not offer a similar programme without Hefce funding.

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¡°The majority also felt that it was unlikely that many of the employers would continue to offer the internships on a paid basis without some kind of subsidy,¡± the report says.

david.matthews@tsleducation.com