The number of high-grade GCSEs increased this summer by the greatest margin for five years, but failure rates remain higher than they were in 1992, figures revealed this week.

The share of entries awarded a C or better rose by 1.1 points to a new record of 59.2 per cent, while the proportion of A* and A grades increased by the largest margin for four years, by 0.7 points to 17.4 per cent.

However, disaffection among low-achievers was revealed as the proportion of GCSE entries given a U grade showed no change from last year’s figure of 2.4 per cent.

While the proportion of A* to Cs has risen steadily from 50.5 per cent 12 years ago, the proportion of entries given a U is 0.8 points higher than it was in 1992, and nearly double the 1.4 per cent it was immediately before Labour came to power in 1997.

And new “applied” vocational GCSEs, taken for the first time this year in eight subjects, had an 8.5 per cent failure rate, three times the rate for academic subjects.

The Confederation of British Industry seized on figures showing that, despite an improvement this year, only 52 per cent of pupils passed maths at C or better, and only 53 per cent of boys got a C or better in English.

Digby Jones, director general, said: “How can school-leavers hope to succeed in the modern world of work if they cannot read and write? Progress on this is an absolute scandal.”

The Conservatives even proposed to introduce separate basic literacy and numeracy tests, which all pupils would have to pass before leaving school.

The Liberal Democrats said that GCSEs were doing nothing for those at the bottom and the top of the academic scale. Phil Willis, education spokesman, said the exam had passed its sell-by date.

Teachers’ unions joined David Miliband, school standards minister, in praising pupils’ and staff’s achievements in improving the proportion of good grades.

Steve Sinnott, general secretary of the National Union of Teachers, said:

“All the carping critics can’t get around the fact that our young people and teachers have worked enormously hard and achieved improving levels of success.”

However, the issue of underachievement will concern ministers. An adviser to Charles Clarke, the Education Secretary, said the question of how to motivate the disaffected was a key issue being considered by the Tomlinson review of 14-19 qualifications, which is due to report in October.

Alan Smithers, professor of education and employment at the University of Buckingham, said the failure of schools to reduce the proportion of Us reflected the fact that D-G grades count for little in league tables.

The Government can point to the introduction of applied GCSEs, taken by 113,202 pupils in an attempt to increase options for the less academic.

Some will argue that higher failure rates are to be expected in these subjects.

The gender gap narrowed this year. Some 54.9 per cent of boys’ entries were awarded a C or better, up 1.3 points on last year, compared to a 0.9 point increase among girls, to 63.3. Geography saw the biggest slump in entries after languages, numbers falling 2.1 per cent to 227,832.

The overall results suggest that schools may be responding to ministers’

exhortations to offer a wider range of qualifications. Traditional full-course entries, though increasing by 2.4 per cent to 5.9 million, failed to keep pace with the 3.4 per cent increase in the number of 15-year-olds.

By contrast, the number of entries for short-course GCSEs rose 15 per cent, while the advent of applied GCSEs also meant a big rise in numbers for vocational courses.