A culture of low expectations in many schools has meant that bright pupils are being let down and are failing to gain top grades at GCSE, according to a new Ofsted report.
The report suggests that clever students become used to performing at a lower level because they are in classes where the work is pitched at middle-ranking students.
Chief inspector Sir Michael Wilshaw said it was "shocking" that, in some cases, school leaders and teachers did not even know who their most able children were.
Children born in the summer months should have lower pass marks than their older classmates, according to a new report.
The Institute for Fiscal Studies (IFS) calls for GCSEs and primary school tests to be "age-adjusted" to ensure "that those born at the end of the academic year are not disadvantaged by taking the tests younger".
Children born in August are 6.4 percentage points less likely to achieve at least five Cs at GCSE, according to the IFS.
Pupils are also two percentage points less likely to go to university when they leave school.
The publication of the report comes amidst growing concern that children born at the end of the academic year achieve less than older classmates.
The IFS is calling on ministers to take action to deal with the effects of the differences.
Ellen Greaves, research economist at the IFS and one of the report authors, said: "Age-adjusting the cut-offs required for pupils to achieve particular grades would ensure that no child is prevented from going on to further or higher education simply because of the month in which they were born."
Controversial plans by Education Secretary Michael Gove to hive off AS-levels as a stand-alone qualification would be ditched by a Labour government, shadow schools minister Kevin Brennan said today.
In a letter to the exams regulator Ofqual, Mr Brennan said Labour had concerns it would damage attempts to encourage poorer students to go to university, and narrow choice for teenagers considering their futures.
If Labour were to win the general election in 2015, they would not go ahead with the move to decouple AS-levels from A-levels, he said.
The proposal, set out by Mr Gove in January, is due to be introduced in September 2015. If Labour were to take office in May that year, it would mean a last-minute overhaul of the A-level system to halt the change before the autumn.
Students will only be able to sit their A-levels in the summer after regulator Ofqual scrapped January exams, according to the Independent newspaper.
The move is reportedly designed to prevent pupils re-sitting exams to obtain higher marks - a culture critics say has led to grade inflation and a devaluing of the exam system.
Michael Barry, the headteacher of St Matthew Academy in Blackheath, London, tells ITV News that Ofqual's findings have "tarnished the teaching profession" and says the body should have resolved the issue by re-grading the GCSE English exams.
Pupils from St Matthew Academy in Blackheath, London, tell ITV News about the pressures they are facing now that their GCSE English results have been downgraded by the exams regulator.
Headteacher Michael Barry told ITV News that Ofqual's finding that teachers "over-marked" English GCSEs is "wrong".
#Ofqual undoubtedly diverting any blame from themselves, but highlighting (at last) implications of high-stakes accountability is positive.
Deputy General Secretary of the Association of School and College Leaders Malcolm Trobe said teachers and schools would be "insulted" by Ofqual's report.
An English teacher has told ITV News that Ofqual's report was the "latest in a category of insults against teachers".
Chris Edwards, who wrote an open letter to Education Secretary Michael Gove in September criticising the decline of A* to C GCSE grades, said:
I'd like to say I'm shocked and surprised by this report but it's the latest in a category of insults against teachers.
You can imagine how demoralising this is for youngsters, they've got to resit exams on Wednesday and you can imagine how difficult it is to sit an exam you've already taken.
Ofqual don't seem to make any reference as to what they will do about this situation and they've turned the blame on the teachers which is unbelievable.
Asked whether teachers were under pressure to secure good grades, Mr Edwards said:
Most teachers thrive on that pressure but it doesn't help that every time results go up it's down to exams getting easier.