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The team saw off its fellow agency incumbents, Publicis and Optimedia, in a final shoot-out after a mammoth nine-month review handled by COI Communications.

Initially four agencies were asked to pitch for the business last summer. Apart from RKCR/Y&R and Publicis, the contestants included the fellow New Deal incumbents St Luke's and its media partner Manning Gottlieb OMD, along with Euro RSCG Wnek Gosper and Unity.

At the time, the review was expected to take about three weeks. However, not long after the process began, there was a change of minister at the Department of Work and Pensions, with Andrew Smith replacing Alastair Darling.

RKCR/Y&R and PHD will now be tasked with developing a multimedia campaign for the New Deal, a broad-ranging initiative which aims to help different groups of people back to work.

New Deal falls within the remit of the DWP and is part of the Government's Welfare to Work strategy.

It targets jobseekers aged 18 to 25, 25-plus and 50-plus, as well as aiming to give single parents and disabled people the opportunity to explore work options.

Commenting on the win, Tony Harris, a managing partner at RKCR/Y&R, said: "This is a very important government initiative and the bedrock of what it has been doing since it came to power. It's a significant project, and will require a sensitive but bold approach."

New Deal was launched in 1998 as part of the new Labour government's commitment to precipitate social change. At the time, it was seen as a precursor of the way in which government advertising would change under New Labour.

St Luke's was appointed to a £12m three-year New Deal brief in November 1997. The agency's initial task was to encourage the one million people aged 18 to 25 who had been out of work for more than six months, back into employment.

The first TV commercial showed a businessman jumping from his seat in a crowded train to harangue embarrassed passengers about the appeal of the New Deal. Hidden cameras then recorded the passengers' discomfort at this unusual behaviour.

More recently, advertising activity has concentrated on the New Deal for Lone Parents, with executions created by Publicis.

The New Deal initiative has been trumpeted as a great opportunity for businesses to make use of the untapped energies and talents of a new labour force. More than 89,000 companies have so far signed New Deal agreements.

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