The government might want Britain to be at the heart of Europe, but the nation's children are saying "Vive la difference!" Or they would do, if they knew what it meant.

Modern language teaching in Britain's schools is deep in crisis. Fewer and fewer children think it worthwhile to learn a foreign language, many of them opting for "soft" subjects offering easier pickings in a world where A* and A-grades are the only currency.

The government has encouraged this process by making languages optional post-14. The effect of this policy change three years on has been devastating. In 2004, 318,963 children took GCSE French; this year just 236,189 candidates sat the examination, a 26% fall in just two years.

It is the same story with German. The number of entries has slumped from 122,161 in 2004 to 90,311 this year, again a fall of 26%, as the majority of comprehensives abandon compulsory language study post-14.

This rapid decline has prompted the government to appoint Lord Dearing, that master of the official report, to conduct a review of languages policy. Alan Johnson, the education secretary, has even conceded that the government might have got it wrong three years ago.

"If the noble lord says to us, this strategy is wrong and we should go into reverse, then we will listen to that advice and we will do that," said Johnson.

But Johnson's preferred route appears to be finding ways of making languages a more appealing option. As he said at the time of the announcement: "We are committed to encouraging young people to embrace languages while recognising they should be offered flexibility in what they study to inspire them to continue learning."

The failure to teach languages routinely under the age of 16 is reaping an unwelcome harvest later, not just in sixth-form studies but in universities. So acute is the shortage of decent language students coming forward for degree courses that the Higher Education Funding Council for England (Hefce) is sinking £4.5m into an initiative that will enable universities to stage more summer school- style language events and to work more closely with schools to stimulate interest.

The government is investing an extra £115m through the National Languages Strategy over the next three years to encourage more young people to study languages.

The latest figures for A-level languages make sorry reading and explain why universities are finding it hard to fill courses. While the year-on-year figures for French and German rose slightly from 2005 to 2006, the 10-year picture shows the extent of the problem.

In 1996, there were 27,563 entries for French A-level, in 2006 there were 14,650 - a fall of almost half at 46.7% - while German attracted 10,726 A-level entries in 1996, compared with 6,204 this year, a 42.2% decline.

While students clearly think languages are optional, Hefce is rather more robust, insisting that mastery of foreign languages is key to the UK's future prosperity.

Fortunately, many of the leading schools on this 2006 Parent Power CD-Rom, where modern languages remain a core part of the curriculum, share this view. In independent schools, 95% still make languages compulsory until GCSE, regardless of the government's line.

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