Up to two million workers will receive a pay rise today when the minimum wage increases by 35p an hour.

The minimum rate - which covers homeworkers for the first time - will rise to £4.85 per hour for adults and from £3.80 to £4.10 for workers aged between 18 and 21.

A rate of £3 an hour will be introduced for 16 and 17-year-olds from today in a move aimed at ending exploitation.

More than 100,000 homeworkers will be better off by thousands of pounds a year under new rules linking their pay to the minimum wage.

Trade and Industry Secretary Patricia Hewitt said the minimum wage had gone a long way to protecting workers from exploitation without affecting employment or the economy.

"We are committed to eradicating poverty pay and today's new rates are another big step towards turning that aim into a reality.

"The change to the homeworking rules will protect people who work in an industry that has a history of exploitative rates of pay, especially minority ethnic and women workers.

"The new rate for 16 and 17-year-olds extends protection to another vulnerable group of people. We want young people to stay in education or training but we must ensure that those who do choose to work are not exploited."

TUC general secretary Brendan Barber said: "From today around 45,000 young workers will get possibly the biggest pay rise they have ever had.

"Young people are being paid as little as £1.25 per hour but a £3 minimum should only be seen as a starting rate.

"Once it has had a year to bed in, we will be looking for an increased rate so that more young people benefit."

He said that although the Low Pay Commission estimated the new £4.85 rate for adults would benefit 1.5 million people, "these estimates are always over-estimates".

"The TUC will be campaigning hard for further increases above inflation," he said.

"Any rate below £5 per hour next year will be a real terms cut in the value of the minimum wage."