The chief inspector, Chris Woodhead, is consulting teacher unions about how school inspectors will report to heads about individual examples of good or bad teaching.
The Prime Minister announced the initiative last month at a grant-maintained schools conference, and Mr Woodhead made clear in a memo to HM Inspectorate that he agreed with the plan.
The Office for Standards in Education has now started to figure out how it will work and guidance will go out to inspectors in OFSTED's next bulletin, said Mr Woodhead.
Launching a more manageable "Framework for Inspection" this week, Mr Woodhead emphasised that - as revealed in The TES two weeks ago - teaching quality and pupil achievement were central. He said although the revisions had been drawn up before the Prime Minister's announcement, the new framework and guidance for inspectors were consistent with it.
Under this guidance, which takes effect in the summer term, teachers' lessons will be assessed according to a tight list of criteria: subject knowledge; setting high expectations; planning; class management and discipline; using strategies which match their objectives and meet pupil needs; effective use of time and resources; assessment and how well it is used to inform teaching; using homework to reinforce and extend what is learned in school.
Mr Woodhead said that the section on teaching quality was "the single most important section in this document". He is said to have taken a keen interest in its wording. Heads will increasingly be judged on their curriculum leadership.
Mr Woodhead agreed that the fact that inspectors will grade individual teachers' lessons according to these criteria would help implement the new plan for reporting good and bad teaching to school heads.
He said it was "disingenuous to suggest that when you're inspecting a school you're not focusing on the quality of the teachers". But he insisted that in published reports the anonymity of individuals would continue to be protected.
Teacher associations had mixed reactions. John Dunford, president of the Secondary Heads Association, said: "If a head doesn't know more about individual teachers than an inspector can find out in one lesson I would be very surprised." However, the initiative "changes the nature of the inspection". Self-evaluation was a more important process.
Heads were not happy with the plan, he said, and OFSTED's consultation on implementing it was "quite different from consulting teachers about the principle".
Peter Smith, general secretary of the Association of Teachers and Lecturers, welcomed the consultation. "My understanding is that OFSTED is thinking in terms of a guidance code for heads once inspectors have thrown their brickbats and bouquets," he said. "That seems to me to be eminently sensible."
Mr Woodhead said inspection reports would be more helpful to schools, but would become less stressful. There would no longer be a need for schools to burn the midnight oil preparing paperwork. However, reports would show progress within the school, capture the school's character better, and be more specific. He wanted examples included to show what is meant by "good" or "satisfactory" teaching.
Separate sections on equal opportunities and special needs have been scrapped, but these issues now permeate the framework. For the first time, inspection teams will have to include someone responsible for reporting on equal opportunities, special needs and the education of children whose first language is not English. Inspectors are also told to pay attention to any differences in attainment among different groups and genders.
However, guidance on inspecting the way teachers provide for children of different races and sexes appears to have been watered down despite the overall emphasis on teaching quality stressed by Mr Woodhead.
An earlier draft leaked to The TES said inspectors should judge the extent to which teaching motivates pupils "whatever their ability, ethnicity or gender", while the final version refers to meeting the needs of "all pupils", and makes specific reference to special needs and pupils for whom English is a second language.
The change seems inconsistent with other sections. For instance the one on curriculum and assessment includes a reference to the curriculum's contribution to the educational standards of all pupils, "taking account of their age, attainment, gender, ethnicity, background and special educational need".
A spokesman for OFSTED said the reference to "all pupils" meant inspectors had to consider the teaching of everyone in the class, and equal opportunities were stressed throughout the document. It "underpins everything", he said.
Three handbooks and an inspection resource pack are available from HMSO. The handbooks, for nursery and primary, secondary and special schools cost Pounds 9.95 each, or Pounds 22.50 for all three, and come with a copy of the framework. The pack costs Pounds 5.95. The framework is available free of charge from the OFSTED Publications Centre, PO Box 6927, London E3 3NZ.