A major coalition row was brewing on Thursday afternoon after Lib Dem MPs expressed outrage over Michael Gove's plans to scrap GCSEs and replace with them with something resembling the old O-Level model.

The Lib Dems, who clearly were not consulted over what would be a major change to education policy, said the proposals would create a two-tier system in England.

Gove confirmed in the Commons on Thursday morning the government thought the examination system was not fit for purpose and was contributing to declining education standards compared with other countries.

During his statement to MPs there were very few Lib Dems in the chamber, prompting speculation that the party wasn't in favour of the root-and-branch reforms to GCSEs.

A senior Lib Dem MP told The Huffington Post that the plans seemed to be based on "nostalgia" and a "desire to replicate the public school system".

"I remember as one of the last pupils to go through the old O-level system that those kids taking CSEs were seen as less important," the MP told us.

In a sign that the Lib Dems were anxious about Gove's reforms - which will be consulted on over the summer - the party issued a statement by Dan Rogerson, Co-Chair of the Liberal Democrat Parliamentary Party Committee on Education.

He said: " A two-tier system, with all the upheaval and instability this would cause, is not the way to achieve higher standards across the board.

"We want to look forward and work with teachers and schools to give them the freedom and tools needed to stretch pupils, drive up standards and entrench a culture of high expectations in every school."

Michael Gove attended the Commons to give an urgent statement on Thursday after his blueprints for a radical overhaul of the exam system for 16 year-olds was leaked and published in The Daily Mail.

Gove did not confirm he was going to resurrect O-Levels but made it clear that GCSEs were likely to be axed, saying they: "privilege bite-size learning over deeper understanding" and that the league table system "inceitiveises weak schools to choose easy subjects".

"We want to tackle the culture of competeitive dumbing down," he said. "We want a curriculum that prepares all students for success at 16 and beyond."

Announcing a consultation on the changes, Gove said it would be "a conversation about how we raise standards, it will be broad but it will be conclusive".

Another Lib Dem source expressed their fury to the Press Association, saying that the plans looked like "a huge upheaval for very modest gains," and the party would not accept a policy which would leave "a large number of children behind at a relatively young age".

"We are very, very hostile to something that looks like it is going to return to the two-tier system of the past," they added.

As Thursday went on, more senior Lib Dems went on-record opposing the plan. Lib Dem president Tim Farron described it as "madness", castigating Michael Gove for announcing such a major policy without consulting coalition partners first.

In a statement Farron said: "The O’level / CSE system was divisive and dumped millions of young people into a second division from which they couldn’t escape, providing a fixed limit on the expectations of those young people who were saddled with having to sit the CSE.

"By all means, lets look at the GCSE and consider reforms – Michael Gove is perfectly within his rights to do that – but lets kill off immediately any talk of returning to the divisive 2-tier system that Mrs Thatcher wisely ended in the late 80s.”

The chair of the Lib Dem Parliamentary Party Lorely Burt told HuffPost: "We created what was called the comprehensive system to make a more equal system, for all chldren to have opportunities. Because once you failed the 11 plus there were assumptions made about your future, which very often were completely innaproporiate.

"I have anxieties about re-creating a two-tier system which we rejected all those years ago. I'd have to see empirical evidence to show that the result of re-introducing a two-tier system would not have have the same results again. I want to see Michael Gove's proposals properly presented before Parliament."

Lib Dem MP and member of the Education select committee David Ward said Gove was "dangerously fixated on a fantasy."

In a statement on his website Ward accused Gove of wanting "to return Britain to a 'golden age' of education that never really existed. Following his previous announcements on rote learning, I wouldn't be surprised if chalk boards and compulsory fountain pens are next in the pipeline.

"He needs to realise that the world has moved on. His proposal for a two tier system risks undermining decades of progress on fairness and social inclusion in schools. And the last thing our education system needs now is yet more disruptive upheaval, distracting teachers' attention away from where it needs to be - on driving up standards for every child.

"Rather than taking us back to an age when most children started their adult life saddled with qualifications that were seen as second rate, the Education Secretary would be better off focussing his attention on giving teachers the freedom and resources they need to stretch all pupils and creating a culture of high expectations in every school."