Her comments come as a poll published today shows an overwhelming majority of people favour paying interns for the work they do.
The poll of over 1,000 businesses by the Fair Work Commission found that seven in 10 working people say employers should always pay interns.
It also found that the majority of those surveyed found that adverts for unpaid internships should be made illegal.
Hazel Blears, MP Salford and Eccles, said: "Long-term, unpaid internships are a modern-day scandal, and they are rife in the very areas where so many young people are desperate to get a foothold. The worst offenders are employers in media, fashion, finance and, until recently-I am ashamed to say-in politics."
She added: "Some of Britain's leading companies are waking up to the reality that unpaid internships are bad for business, because they limit the talent pool employers can draw on to people who can work without pay."
Liz Bingham, managing partner for people at Ernst and Young, said: "Internships are jobs and should be treated as such. I would like to see all internships paid for.
"Young people deserve to be paid for the work that they do on internships - it's reprehensible when they are not."
However, Rob Killick, chief executive of cScape thinks internships are good for both the business and the intern. He said: "Sometimes we have a job that needs doing that we cannot get our clients to pay us for and, in the current climate, we cannot afford to pay an experienced person to do it. The work we want doing would involve supervision by a senior manager and would involve learning a set of skills that is very saleable in the labour market.
"Now, if we accept the argument that unpaid internships are wrong then this work will go undone, to the minor detriment of our business, and nobody will get that valuable experience."
