Cutbacks in the number of hours trainee teachers are required to study physical education could hamper the progress of a scheme dedicated to raising the profile of school sport in Wales.
Estyn, the inspection body, examined development of the PE and school-sport initiative (PESS) in schools and centres across Wales in 2004-5.
Its report, published this week, reveals that more teachers than ever before have the confidence and knowledge to teach PE and related activities such as dance.
But inspectors said that higher education plans to reduce PE instruction for trainee teachers in the next academic year could curb future progress because new teachers did not have the necessary skills to deliver the programme.
To date, 2,500 teachers have received training which inspectors say has "significantly improved their knowledge and understanding of physical education".
Teachers have also been given added confidence in PE, particularly in the primary sector, where standards in dance, games and gymnastics have shot up. And the report notes huge improvements in children's sporting ability and health-related fitness since the scheme was launched.
The PESS initiative has been running in Wales for three years, and currently has 45 development centres funded by the Sports Council for Wales (SCW). In secondary schools, pupil behaviour has improved with the introduction of PESS, and increased sporting opportunities have given pupils confidence and self-esteem.
Initial teacher training was also said to be effective, with very good progress on specialist projects such as health-related exercise and computer technology.
Work on improving the transition from key stage 2 to 3 has also improved, as have partnerships with other organisations. And a PESS co-ordinator for special-needs schools has been appointed.
But interviews with heads and teachers reveal that more training is needed in the assessment of pupils. Inspectors also believe that not enough schools have access to PESS and its specialist advice.
Estyn made a series of recommendations aimed at making PESS more widely available.
The Assembly government recently announced funding available until the end of 2008. But schools and centres are increasingly frustrated that they receive cash awards on a termly basis, making forward-planning difficult.
They claim they are expected to plan ahead but only know how much money they have been allocated for a single term.
A PESS co-ordinator, appointed by the local authority, usually manages two development centres. But more money is needed to reach a goal of 66 centres across Wales. Estyn has called on the SCW to introduce an indicative yearly budget.
Doctor Huw Jones, chief executive of the SCW, said: "Physical activity is vital to health, and sport plays a major role. It must be delivered by trained teachers."