Prime Minister Tony Blair today unveiled plans to open a savings account for every newborn baby.

The "baby bonds" could range from £500 for a child from a deprived family to £250 for a baby with richer parents.

The trust funds will receive £100 top-ups from the Government when the child reaches five, 11 and 16.

The policy is designed to help meet the Government's pledge to eradicate child poverty.

The cash will be invested until the child reaches the age of 18 or 21 - when it can be spent on education, training, buying a home or setting up a business.

The Prime Minister said the baby bonds would give every child a "sound financial platform" for the future.

Chancellor Gordon Brown said: "A nation at work should also be a nation with wealth and having created the opportunity for work and for incomes, now we must ensure that people have the security of a base of wealth behind them."

But shadow social security secretary David Willetts claimed Labour had presided over a "catastrophic" fall in savings levels.

He added: "Labour have scrapped the married couple's allowance and made so many complicated changes to the tax and benefits system that millions of families do not receive the benefits to which they are entitled."

Liberal Democrats social security spokesman Steve Webb dismissed the baby bonds as a "pre-election gimmick".

The Child Poverty Action Group welcomed the scheme in principle - but said the Government needed to act to alleviate poverty now.

Updated: 11.45 Thursday, April 26