GCSEs are to be scrapped and replaced by their predecessor, the "tougher" O-level, in the most radical overhaul of the school exam system for 30 years, according to leaked documents.
Education Secretary Michael Gove is set to abolish the national curriculum in English secondary schools the Daily Mail. has reported.
The new examinations will "meet or exceed the highest standards in the world for that age group", according to one document seen by the paper.
The plans have set Gove on a collision course with both teaching unions and the education secretary is likely to face opposition from the Conservatives' Liberal Democrat partners in the coalition.
Dan Rogerson, co-chair of the Liberal Democrat parliamentary party committee on education, reiterated the importance of avoiding "instability".
"A two-tier system, with all the upheaval and instability this would cause, is not the way to achieve higher standards across the board.
"Reform needs to be managed carefully and we should avoid creating a huge amount of turbulence and distraction in the education system for no real gain.
"We want to look forward."
During an urgently-tabled question session in the House of Commons, Gove refused to confirm whether the reports were true but said there was "already a two-tier education system".
"These ambitions will require careful implementation. It is in all our interests that our children do better than before."
Under his proposals, pupils would begin studying for "explicitly harder" O-levels - covering traditional academic subjects such as English, maths, history, modern languages and the sciences - from September 2014.
"Those starting GCSEs in 2013 are the last pupils who will have to do them," one document states.
Pupils will begin sitting the new O-levels from 2016, with papers set by a single examination board to provide a single "gold standard" test across the country.
Less able pupils will sit simpler examinations similar to the old CSEs. They will include simpler tests in English and maths in order to provide them with "worthwhile" qualifications.
In order to encourage schools to adopt the new exam, the requirement that pupils should seek to obtain five good GCSEs graded A* to C will be abolished leaving them free to take the new O-levels.
Gove is said to want to reverse an "historic mistake" by the Tories in the 1980s when he believes the creation of GCSEs led to a collapse in academic standards through grade inflation and a proliferation of "Mickey Mouse" courses.
The education secretary allegedly believes the exams have "gone beyond the point of rescue," sources told the BBC.
But Chris Keates, general secretary of teachers' union NASUWT called Gove "breathtaking arrogant" and insisted the current system is "not broken".
"Thousands of young people will be taking their GCSEs today and at a time when they need a confidence boost they are being told by the Secretary of State that the examinations they are taking are worthless.
"There is no evidence that the current system is broken, that examinations are getting easier or that our qualifications are trailing behind the best in the world.
"Michael Gove's arrogance is breathtaking. Not only is he upsetting thousands of young people, parents and teachers but he is also consigning Margaret Thatcher's historic education reforms to the dustbin of history."
The changes will see a return to individual examinations in physics, chemistry and biology instead of a single, combined science qualification.
Maths students will be expected to study complex subjects like calculus in order to get the top A grades, while English literature students will have to write longer essays and will not be allowed to take set texts into the exam room.
Gove is said to be preparing to announce his plans formally in the next two weeks before launching a 12-week consultation. None of the changes require legislation.
For Labour, shadow education secretary Stephen Twigg said Mr Gove must spell out the implications of his proposals to parents.
"To succeed in the modern world, young people need a broad education, not a narrow one. Will pupils doing these new exams get access to creative or innovative learning that will create the jobs of the future?" he said.
"Will this divide children at 14 into winners and losers?
"With no secondary national curriculum how will he ensure a rigorous approach to learning in all schools?
"If there is to be a major overhaul parents will want reassurance that the new system will enable all children to progress and reach their full potential."
A Department for Education spokesman said: "We do not comment on leaks."
Gove has previously said the current exam system is effectively a "race to the bottom". GCSEs have had their fair share of controversy over the past 12 months. In May, one religious studies question asked students "Why do some people hate jews?", while in February it emerged a teacher may have inflated GCSE grades after she faked her degree to get onto a leading examination board.