David Mattinson, head of Elloughton primary in the East Riding, is considering defying the Government over the tests which he believes damage his pupils' education.
The Department for Education and Skills last week rejected his application, which would have allowed every school in the county to have replaced formal tests with a system based on teacher assessment.
But Mr Mattison said: "I am of a mind to go ahead as planned." He is now taking legal advice from the National Association of Head Teachers and will take a final decision in the new year after consulting governors, parents and local heads.
His application was the first of its kind by a school hoping to use the power to innovate, introduced in the Education Act 2002.
"All the innovation unit's literature talks about giving schools the freedom to move outside existing legislation but you come up with something slightly challenging and the Government doesn't want to know," he said.
Mr Mattinson believes scrapping tests will raise standards and reduce pupil stress.
The school is still waiting to receive written confirmation of the decision including the reasons for refusal. Ministers had said they would not approve any application to "innovate" which diluted the testing and accountability regime.
David Hart, NAHT general secretary, described the decision as "regrettable".
"The Government is not willing to give teacher assessment a go for fear that it will prove just as rigorous as the testing regime. It appears determined to stick by tests come hell or high water."
He said there would be considerable legal difficulties in abandoning tests without the protection of a formal industrial action ballot.