The Treasury could replace the Home Computing Initiative — a scheme to give employees access to cheap computers — after a number of business groups objected to government plans to scrap the scheme.
In his budget speech last month, Gordon Brown axed the scheme, which gave tax breaks for businesses that provided employees with PCs.
But following criticism from business leaders, the Treasury said it is looking at alternative ways of boosting IT skills for employees.
The Treasury said the scheme had been abused: "There's been a lot of controversy over the Home Computing Initiative. It had to go. But the government still has initiatives for raising education and skills in IT.
"We are looking at potential vehicles to do that. There's nothing concrete yet. We are putting together the best proposals to move forward."
The chancellor initially said the abolition of the HCI will recoup the Treasury about £150m by 2009.
Under the HCI, employees could take out tax-free loans from their companies to buy home computers. More than 500,000 households took part in the scheme.
The general secretary of the TUC, Brendan Barber, has welcomed signals to replace the scheme.
In a statement, he said, "While we think stories of its abuse have been exaggerated, we would have no problem with a new scheme that targeted assistance more effectively.
"Tighter rules on what the money could be used for, stopping higher-rate tax payers and reducing the amount that can be spent on hardware to ensure that the help goes towards reasonable standard entry-level PCs, while keeping an element for training and support on top should all be explored."
Sir Digby-Jones, director-general of the CBI, also criticised the Treasury, stating it would undermine attempts to boost computer literacy.
Last week he said: "This flies in the face of everything the country is trying to achieve on skills. Seventy-five percent of people affected by this change are lower-rate tax payers.
"They will want to know why the government has deprived them, and their families, of this opportunity and companies will want to know why they have only been given two weeks to work out what to do with their schemes. Computer literacy has to be a given in a globally competitive economy."
Talkback
The Governement has no idea about how to train our population in IT skills. They think that an NVQ is a pretty neat idea.
The problem in the UK is that the lowest common denominator is seen as the level to aim for. We drive down standards by worrying about what the least able will be capable of. This creates a lead weight that slows the whole process down.
Training or cash-cows?:-
If the level of training is aimed at Btec, NVQ and A+, then we really are lost, and we will lag behind other nations that take IT knowledge and skills more seriously. Training companies love this, it's a quick and easy profit with little effort.
The wrong trousers:-
Understanding how to switch on a computer is less than productive in my view. We should raise the level of teaching in schools, reduce the the number of academic courses that parade as University computing degrees and introduce some practical engineering technologies. Put a limit on the number of 'media' courses, and start to look more seriously at producing people who actually understand the core technologies that drive networks. It's networks and their application and applications that matter, not whether one can produce a rather 'nace' Flash advert.
Too many bits of paper:-
I know many, many people with university degrees in computer science, who can't put an RJ45 connector on the end of a Cat6 cable. I know many people with MCSE certification who don't know how to install and configure a server for a particular role.
We've lost the plot. Our focus is way off centre. We need to teach people the real core technologies and not be scared to insist that they must learn them and know how to implement them.
Certification is a means to an end, not an end in itself.
Wake Goevernment - your sleep walking with fools.
Thank you. I feel better now.