Inner-city secondaries are falling even further behind affluent schools in the suburbs and ministers must decide whether funding should be skewed in their favour, the chief inspector said this week.
David Bell challenged the Government to stand up to heads of middle-class schools which complain of being treated unfairly.
After a decade of trying to improve schools in deprived areas the gap in achievement between rich and poor pupils remains, he said.
Mr Bell attacked schools which are manipulating admissions to grab the best pupils. "All schools should take responsibility for all pupils," he said.
"Waiting around in the hope that a better clientele will turn up is not the answer. Nor is a simple weeding out of the less desirable types because these youngsters have to be educated somewhere."
He called for a funding review to look into giving inner-city schools more money at the expense of those in more affluent areas.
Office for Standards for Education research shows that since 1996, the year before Labour took office, the gap in attainment between rich and poor students has narrowed in primary schools but widened in secondaries.
By the age of 16, 81 per cent of pupils whose parents are in "higher professional" occupations gain at least five A* to C GCSEs compared with 32 per cent whose parents have "routine" jobs.
Last month Philip Hunter, the schools adjudicator, warned that a growing number of popular schools were flouting admissions rules to recruit more affluent pupils.
Mr Bell's speech to the Fabian Society yesterday marks the 10th anniversary of an Ofsted report which painted a bleak picture of urban education.
Writing in today's TES Mr Bell says there has been improvement during the past decade, but not enough.
"There remain difficult questions. For example, is there an additional cost in educating pupils in the most deprived circumstances? If so, should funding systems change and is government, any government, prepared to face down the charge that other schools are being treated unfairly?"
Mr Bell's comments were backed by Martin Johnson, of the Institute of Public Policy research, the Government's favourite think-tank.
"The Government needs to be bold enough to risk the wrath of schools with more affluent pupils and encourage a radical redistribution of money towards schools in more challenging circumstances," he said.
The Government hopes that initiatives such as Excellence in Cities combined with a new focus on personalised learning will help raise standards in urban schools.
But the chief inspector warned politicians not to blame each other or teachers for low achievement.
"The brutal fact is that the difficulties that some schools face have been around for many years and successive governments, national and local, have not conclusively dealt with them."
Schools in urban areas face a harder job with high numbers of low attaining pupils whose academic progress is hindered by social problems.
"Schools with large numbers of low-attaining pupils are not necessarily unsuccessful schools.
"A general recognition of this would go some way to helping people who work in schools in deprived areas to cope with the pressure."
A Department for Education and Skills spokesman said: "The funding system already recognises the extra cost of educating pupils in the most deprived circumstances."