Older workers may be able to work beyond the age of 65

Under the plans, all forms of direct and indirect age discrimination will be outlawed from October.

While the plans have been broadly welcomed, lawyers have warned they may lead to a rash of employment tribunals.

Legal experts are concerned the law may affect redundancy pay and the minimum wage, which both vary according to age.

According to experts, when similar legislation was introduced in Ireland, related court cases increased by 19%, while in the US there was a 40% rise.

'Clear steer'

Nicola Dandrige, head of equality at trade union law firm Thomsons, said there were "large areas of uncertainty" about how the new regulations will be applied.

It's all about choice - not work till you drop but choose when you stop Alan Johnson, Trade Secretary

"That could continue until we have a clear steer from the courts of how the laws operate," she added.

But employment relations minister Jerry Sutcliffe said it was important to remove the barriers to work.

"We want to make sure this is a culture change ... to try to encourage employers not to discriminate in adverts and recruitment and look for whizzkids as opposed to more maturity and experience," he added.

"We think we've struck the right balance."

Under the plans the government also revealed that in five years' time it would look at scrapping the retirement age completely.

Worker choice

"It's all about choice - not work till you drop but choose when you stop," said Trade Secretary Alan Johnson as he unveiled the plans.

The new laws - which still have to win Parliament's approval - will ban age discrimination in the areas of recruitment, promotion and training.

However, it will not affect the age for claiming the state pension.

In order to ensure retirement is not used as cover for an unjustified sacking, company bosses will have to give an individual at least six months notice of their retirement date.

By contrast, workers will also be able to remain in their job beyond the age of 65 if their employer agrees.

"As we are living longer and healthier lives, it is essential that the talents of older workers are not wasted," Mr Johnson added.

Widespread support

The proposals have been broadly welcomed by employers' groups and trade unions, with the TUC saying they would "make a world of difference".

CBI director of human resources Susan Anderson said the new laws would "cement changes already well under way in UK workplaces".

But she added that the new laws should not be seen as a "carte blanche for aggrieved employees".