James Sabben-Clare, headmaster of Winchester College and chairman of the Headmasters' and Headmistresses' Conference said recent changes in A-level intended to make the exam accessible to a broader range of pupils, were "a good thing".
However, they meant that the exam could no longer pick out the most able. While he declined to say the exams themselves had become easier, he said they had become "easier to do well in".
He added: "Only 20 years ago the most successful schools had about a third of their candidates getting A grades; this year, it was three-quarters. I know, at least in the case of our pupils at Winchester, that the leavers of 1999 were no cleverer overall than those of 20 years before.
"A system which does not identify scholars is not likely to be nurturing them either. And that is something we must not be complacent about.
"For our abler pupils we need to set the expectations higher and try to resist the effect of proliferating exams with shorter syllabuses and more tightly prescribed forms of question and answer, of the inflation of grades and the
tyranny of the league tables."
He said in future brighter pupils should skip GCSEs in some subjects, and move straight to A-levels and the new Advanced Extension tests planned by the Government.
However, he said the new tests "could only provide a small part of the answer", adding: "It is the very culture of continuous external testing between the ages of 14 and 18 that is damaging." There was a "huge job" to educate parents that qualifications and quality were not the same thing.
Speaking to fellow HMC heads at the opening of their annual meeting in Bristol, he said: "A-levels have changed over the years, whatever the QCA study may say about standards having been broadly maintained. The content has in most, probably all, subjects been reduced.
"The double effect of modularity and easier AS exams is likely to accelerate the trend." Grade boundaries had moved too, to the advantage of candidates at every point on the scale.
Mr Sabben-Clare also issued a warning that the new, one-year AS-levels, to be introduced in 2000, might lead to universities making earlier unconditional offers and pupils leaving school without taking A-level at all.