It casts doubt on the Government's policy of creating specialist and leading-edge schools - which often attract a disproportionate number of middle-class students. Such segregation of pupils damages overall performance, it says.
Countries that perform best educate all children well, regardless of background and allow schools freedom from central control, says the report by the Organisation for Economic Co-operation and Development.
The OECD praises Finland for its comprehensive system and for giving teachers a high degree of responsibility and autonomy.
Andreas Schleicher, head of the OECD's educational indicators and analysis division, said there were no advantages to selection: "The trade-off between quality and equity does not exist in reality," he said.
The OECD's Programme for International Student Assessment (Pisa) measures how well 15-year-olds perform in English, maths and science in 43 countries. When initial results from 32 countries were published in 2001, the Government hailed the UK's results as the best ever. The UK came fourth in science, seventh in literacy and eighth in maths.
Of 11 countries included for the first time in the report, only Hong Kong-China performs better (and does so in all three subjects).
But Pisa also shows that the UK has one of the largest attainment gaps between rich and poor students in the developed world.
Despite this, ministers are determined to press ahead creating a "post-comprehensive" secondary system. David Miliband, schools minister, this week announced that 245 new specialist schools will be created in September, the largest-ever increase in the programme.
From September 45 per cent of secondary pupils will attend a specialist school. He also announced the first 103 schools to form leading-edge partnerships to share good practice and solve problems such as the underperformance of boys. The OECD report shows that the gender gap in reading in particular is a worldwide phenomenon. Girls do significantly better than boys in almost all countries. Boys' advantage in maths is less clear cut.
Despite their high ranking, British students spend less time reading than teenagers in most other countries.
The report found children read best when they used a variety of media including email. "Reading an email can be as important as reading books," said Mr Schleicher.
Literacy Skills for the world of tomorrow - further results from Pisa 2000 published by the OECD and Unesco is available from www.pisa.oecd.org
International, 14 Analysis, 18 Research focus, 27