Michael Gove confirmed today he will not press ahead with plans to scrap GCSEs, saying the reforms were "a bridge too far".
The education secretary told the Commons that there was a consensus that the exams system needs to change.
But he admitted that flagship plans to axe GCSEs in favour of new English Baccalaureate Certificates in core academic subjects was "one reform too many at this time".
He told MPs: "I am happy to aknowledge today that was an error."
Gove had originally wanted to introduce the new EBacc certificate in England in the five core academic areas of English, maths, science, languages and humanities - history or geography.
Each of the core subjects would have been handed to a single examination board - a move he argued was essential to prevent boards "dumbing down" standards to attract more schools.
However it has been suggested Whitehall officials warned the plan could fall foul of EU procurement rules.
Asked whether Nick Clegg had stepped in to blok Gove's plan to replace GCSE's, Downing Street said today's announcement was a "government decision", refusing to be drawn on reports of a coalition split.
Labour's shadow education secretary Stephen Twigg said the government's education policy was now a "shambles".
"Under this government the words GCSE and fiasco seemed to be linked indelibly this is a humiliating climbdown," he said.
"The trouble with this secretary of state is he thinks he knows the answer to everything so he digs out the fag packet and comes up with this latest wheeze."