The Prime Minister baulked at forcing oversubscribed secondaries to take an equal number of pupils from each ability range, fearing such a move would be portrayed as social engineering and an attack on school autonomy.
Early white paper drafts said "fair banding", should be compulsory. But despite support from senior figures in the Department for Education and Skills, the final version pledged only to encourage schools to adopt the policy.
Conor Ryan, the Prime Minister's education adviser, and Sir Cyril Taylor, chairman of the Specialist Schools and Academies Trust, in their book, Excellence in Education, backed banding as more equitable: "Without some form of banding and wide catchments, specialist schools cannot create the choice that is promised."
Ministers hope the white paper will reform the school system, extend parental choice through new trust schools and tackle underperforming schools through a tougher inspection regime.
It signals the death of community schools. All new schools must become trust schools, free of local authority control which can be run by businesses, churches, parents or voluntary groups, or otherwise self-governing.
Senior Labour figures and backbenchers fear trust schools will be elite schools for the middle classes.
A Labour source said: "There are large parts of the white paper that present lots of problems for many MPs. They agree with John Prescott that the choice will only really be for middle-class parents."
Ruth Kelly, the Education Secretary, was cheered by Conservative MPs in the Commons in sharp contrast to the muted reception given to her speech by Labour backbenchers. Conservative support means the Bill is unlikely to be defeated in the Commons.
The white paper sets out a duty for local authorities to promote "choice, diversity and fair admissions". Councils will be barred from creating community schools. Existing ones will be encouraged to opt out of local authority control.
Heads' leaders said there was little in the proposals for schools.
But Terry Creissen, head of Colne community school in Colchester, Essex, said it would be welcomed by former grant-maintained heads such as himself.
The Government appeared to be confused over plans for councils to accelerate the closure of failing schools. The white paper said local authorities would have to "consider the full range of their powers immediately on receipt of an adverse Ofsted report". In certain cases this would mean "immediate closure of the school".
The DfES first confirmed that LEAs would have the powers but it later said that immediate closure was intended for schools which had been in special measures for a year, acknowledging that this was unclear in the document.
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