A report produced by the Confederation of British Industry and sister organisations in six other European countries, puts forward for the first time a private-sector agenda for state education reform.

And Britain appears to be the model for most of the business leaders’ demands.

Their wishlist for every European country includes: performance-related pay, school control of their own budgets, externally- examined tests for pupils, national qualifications for headteachers and an “independent national body to monitor and evaluate schools’ performance”.

While Austria, Denmark, France, Germany, Italy, and the Netherlands all fail on a number of these key criteria, Britain passes with flying colours, with each of the reforms either in place or in the pipeline.

France and Germany flounder on more than half of the report’s 10 recommendations. Britain only falls short on the uneven quality of its careers guidance sevice and its links between schools and business.

CBI president Sir Clive Thompson said: “The UK Government has clearly recognised the need for reform and we applaud the commitment shown by the Secretary of State David Blunkett in pioneering changes to our education system. “We still have a long way to go but believe we are going in the right direction.

“Too many youngsters across Europe enter the job maket lacking the basic skills of numeracy and literacy which should have been acquired in primary school. And employers today need and expect much more than the basic skills. They want young people who can flourish in the knowledge economy and who are keen to go on learning.”

However, Britain is still trailing other countries in its spending on education. Spending per student in 1995 at all levels of education including higher education, was lower than any of the other countries at pound;4,222.

The European Union average was pound;4,934.

Copies on the report can be obtained from the CBI on 0171 395 8247