According to the China Youth Daily, the fraud was uncovered when statistics showed the city's percentage of retarded children was four times the international average of 0.4 per cent. With these pupils' results not included, the schools could boost the percentage of students gaining university places. The schools could also secure extra government funding for teaching the "retarded" pupils.
An investigation was launched after one boy who was labelled retarded went on to be ranked in the top 10 students in his secondary school. Seven students have been re-admitted to mainstream classes.
The newspaper said teachers involved had "weak hearts" and had deprived students of a normal education to boost the prestige of their schools. The fraud would affect the children's schooling as well as their marriage prospects and future careers. Fresh exams for all students who may have been improperly categorised have been ordered.
Teachers are under intense pressure for their pupils to achieve high exam results, according to teacher Jiang Bing. With class sizes of 50, they would readily label slow pupils as retarded, she said. "They are not given special help."
In many areas, bonuses worth up to Pounds 108 a year are payable to teachers - dependent on exam results.
Local education bureaux in China rank schools by pass rates in exams at 16-plus and 18-plus. The results are sent to every school but are not made public. However, the number of students gaining university places from each school is published and announced on television.
In another corruption scam, county authorities in Fujian Province found that more than 170 teachers hired from neighbouring Hunan Province were impostors, according to Xinhua (the New China News Agency).
Of 471 Hunan teachers transferred to Huian county in Fujian, more than one third held false qualifications. Many were found to be unqualified, with some not having attended high school.
Corruption among officials in Hunan and Huian was responsible, said Xinhua. Local officials demanded up to Pounds 580 from each recruit to process applications. They would fabricate CVs, past records and papers required for them to be hired. In Huian, recruitment exams were made "extremely easy", said Xinhua.