More than half of all pupils with seven or more good GCSE grades do not go straight on to take any further qualifications, a new report has revealed.

The study, compiled by the Higher Education Policy Institute, shows that significant numbers of pupils who do well in their GCSEs do not then study A-levels or equivalent vocational qualifications.

Fifty-two per cent of pupils with seven A*-C GCSE grades have not achieved a further qualification by the age of 18. One in five pupils with nine A*- C grades similarly fails to progress beyond GCSE.

And 14 per cent - or 19,000 - of 16-year-olds with 10 or more good GCSEs do not go on to further academic study.

Bahram Bekhradnia, director of the institute, said: “There are thousands of children every year who don’t achieve their potential. These are pupils in the top 50 per cent of achievers at GCSE.

“They don’t just drop out of school - they drop out of all further education activity as far as we can see. The sad truth is that they seem to be lost to the education system at age 16.”

There is also a clear north-south divide in achievement: 29 per cent of 18-year-olds in the North East of England attain two A-levels, compared with 42 per cent in the South East.

And girls are significantly less likely to drop out than boys: a third of 19-year-old boys were qualified to A-level, compared with 42 per cent of girls.

Mary Bousted, general secretary of the Association of Teachers and Lecturers, suspects there is also a significant class divide. “I think bright, working-class kids are absolutely terrified of debt,” she said.

“That doesn’t mean they have problems with mortgage payments. It means the debt collector comes round, with 180 per cent interest rates. If you’re afraid of debt, why go on and do A-levels? You want to go out and get a job.”

She questioned whether additional qualifications genuinely produce higher wages, particularly for the most vulnerable pupils.

But Mr Bekhradnia hopes that government plans to raise the school leaving age will encourage more pupils to take A-levels or equivalent qualifications.

The Government’s target is for 54 per cent of all pupils to achieve such qualifications by 2011.

“We have come a long way in improving attainment,” a Department for Children, Schools and Families spokeswoman said.

“We now have record numbers getting the grades they need - not only at GCSE but at A-level and beyond. But there is always more we can do to ensure every child fulfils their full potential.”