A 30 per cent drop in the proportion of failing secondaries was revealed by David Bell, chief inspector, in his annual report this week.
Teaching has improved, pupils are achieving more and behaving better. This has all contributed to the sharp fall in the number of failing secondaries and a smaller one in failing primaries which Mr Bell said were part of continuing improvements throughout the education system.
But Mr Bell launched a stinging attack on the one in 10 primary and secondary schools which provide "nothing better than mediocrity".
He said: "While on the surface all may appear to be well in these schools, if we dig deeper we find that achievement could be better in some subjects, or for some groups of pupils, and that these schools are falling way behind in terms of providing the sort of education we find in our best schools."
Steve Sinnott, general secretary of the National Union of Teachers, said:
"I welcome the fact that David Bell recognises the effectiveness of the large majority of schools.
"The chief inspector, however, has to be very careful with his use of language. Mediocrity is a word which is as damning as failure. It is a small jump for those hostile to maintained schools to ascribe failure to the whole system."
The 2004-5 report also highlighted concerns about the quality of assessment, standards in GCSE maths classes, and the use of teaching assistants to work with low-achieving pupils.
Weaknesses in the way schools use assessment have left the majority of secondary pupils unclear about how to improve their work.
Primary teachers who rely too heavily on assistants to work with low-attaining pupils risk isolating them from the rest of the class and depriving them of specialist subject knowledge that could help them improve.
And a shortage of specialist maths teachers and the Government's focus on improving standards in the early years of secondary had led to a sharp drop in standards in maths classes for 14-16-year-olds, Mr Bell said.
The proportion of secondaries where behaviour is good or better rose during the past 12 months and is now at least satisfactory in a majority of secondaries.
Behaviour is good in most primaries, although significant problems of low-level disruption persist at both primary and secondary level.
Attendance also remains a concern. Despite improvements, it remains unsatisfactory in a fifth of primary and secondary schools.
But the overall message was one of continued improvement.
One out of 25 primaries inspected during 2004 was unsatisfactory or poor, compared to one in 20 a year earlier. The number rated good or better remained unchanged at 68 per cent.
Seven out of 10 secondaries were judged to be good or better and the proportion placed in special measures fell from 10 to 7 per cent.
Mr Bell defended Ofsted's record, saying that it had a positive impact on standards: 60 per cent of schools placed in special measures by inspectors were judged good or better at a subsequent inspection.
New short-notice, more frequent inspections, would build on this success by identifying coasting schools and forcing them to improve.
Ruth Kelly, the Education Secretary, said: "Our reforms are working. Eight years ago the report card for education in this country was bleak: that picture has now been transformed."
The Annual Report of Her Majesty's Chief Inspector of Schools 20045 is available from www.ofsted.gov.uk
* 1 per cent of schools were in special measures at the end of 2004-5 compared to 1.5 per cent 12 months earlier
* 68 per cent of primaries and 70 per cent of secondaries were good or better
* improved pupil attitudes and behaviour but attendance is unsatisfactory at one-fifth of schools
* underachievement of boys remains a concern
* a "marked drop" in standards in key stage 4 maths
* facilities for PE and music unsatisfactory in a quarter of schools
* heads of department forced to learn on the job because of inadequate training