A levels could be scrapped within six years and replaced by work-based diplomas, under the biggest exams shake-up in 20 years, the Government announced yesterday.

Ed Balls, the Schools Secretary, refused to guarantee the future of the exam in a reversal of the position taken by the Blair Government. He said that the diplomas could become the “jewel in the crown” of the education system.

But in doing so he rejected calls from the education Establishment to scrap A levels in a review planned for next year. Instead, he gave the new diploma time to compete with the existing exams to become the “qualification of choice” for 14-to-19-year-olds. Many believe that he has sounded the death knell of A levels.

Mr Balls extended the diploma to include languages, sciences and humanities in a move designed to appeal to the universities. The review, due for 2008, has been postponed to 2013 and will be expanded to cover all qualifications.

The Conservatives, who could be in power by 2013, swiftly made plain that they would not be bound by the review.

Michael Gove, the Shadow Schools Secretary, said that the new diplomas in academic subject areas would undermine the traditional qualifications.

Mr Gove said: “Diplomas were supposed to be about improving vocational education not undermining academic excellence.

“We support the reform of vocational learning but these new exams are designed to subvert GCSEs and A levels.”

The scrapping of A levels and their replacement by vocational diplomas was proposed by the Tomlinson review two years ago.

But Mr Blair and Ruth Kelly, then the Education Secretary, sided with the CBI and rejected the plan, pledging that GCSEs and A levels were “here to stay”. Gordon Brown and Mr Balls have often spoken of the need to make exams more work-based. The move marks a break with the Blair era.

Mr Balls was flanked by Sir Mike Tomlinson, the former head of Ofsted, and Richard Lambert, director-general of the CBI, as he made his announcement, which trod a fine line between both viewpoints. Sir Mike was able to welcome the expansion of diplomas and Mr Lambert the postponement of a review that could have led to an earlier scrapping of A levels.

A source close to Mr Balls said: “He is giving diplomas their chance. He is not scrapping A levels now. The market will decide.”

Asked yesterday whether he could give a guarantee that GCSEs and A levels would survive the review, Mr Balls replied: “It will be an open-minded review. Clearly, I’m not going to give you any guarantee about the outcome of that 2013 review.”

The qualifications are the biggest reform of education since the introduction of GCSEs in the mid1980s.

They are supposed to break down the barrier between practical and theoretical education, but those being introduced from next year cover vocational subjects such as hair and beauty and travel and tourism, raising questions about their credibility.

The new diplomas will be available from 2011, they will have “specially designed content, developed by a group of leading academics and employers”, he said.

Mr Balls denied that they were drawn up because the first ones were unlikely to be accepted by traditional universities or parents.

University leaders praised the more academic bias of the latest diplomas.

Ann Hodgson, from the University of London’s institute of education, served on the Tomlinson inquiry committee that produced a report leading to the current reform of education.

Dr Hodgson said: “Diplomas as they were could not have stood against A levels and GCSEs. They wouldn’t have stood a chance.” She said that there was a big difference now.

The diplomas will be offered from next year at 900 schools and colleges. They have been welcomed by several big businesses, including LandRover, Vodafone and BT. It was announced yesterday that at least seven universities, including Leeds and Nottingham, would accept the engineering diploma as a way on to relevant degree courses.

Concern has been voiced about the possible cost and confusion. Students could mix old and new by taking diplomas and GCSEs at the same time, or higher-level diplomas with A levels.

Schools will form partnerships with neighbours, but providing 17 different diplomas alongside GCSEs and A levels is bound to prove a logistical nightmare. Teachers will need to be trained and transport provided between schools.

John Dunford, general secretary of the Association of School and College Leaders, said that a coherent system would be needed for the diplomas.

Dr Dunford said: “Adding three more diplomas to the 14 already under construction by 2011 is a huge programme for an education system that is punch-drunk with change in recent years.”

Diplomas will run at three levels, combining academic study with practical training and work experience.

They will contain compulsory elements, including English, maths and information technology, and optional specialisms. Much of the examination would be through coursework and internal assessment.

Times recommends

• Students abandon the drink for gyms and juice
• Ofsted: third of Baby P-style reviews inadequate
• Top boys' school picks first woman head