Delegates unanimously voted to accept the policies proposed by education spokesman Phil Willis, including scrapping the thousands of targets set for schools in order to reduce bureaucracy.
Instead of the 4,585 targets set by the Department for Education and Employment, schools should be required to develop an individual education plan for every child, Mr Willis told the party's conference in Bournemouth this week.
But James Kempton, Islington's chair of education, demanded that the targets remain.
Targets had helped raise expectations and standards in his London borough's schools, said Mr Kempton. He took over as chair of education nine months ago, just after Cambridge Education Associates won a contract for the management of Islington's education services. The firm has been set 411 targets for school improvement, which it must hit if it wants to make any profit from the contract.
"National targets are not about bureaucracy, they are about raising standards," Mr Kempton told delegates. "Scrapping them would damage what we can achieve."
Despite his opposition, delegates supported the education policies of the party's pre-election manifesto and supported an amendment clling for the law to be changed so that universities could not charge top-up fees.
They backed the introduction of a new maximum class size of 25 for all primary pupils, and for secondary language lessons and science and technology practical sessions. They also agreed that primary teachers would receive statutory time out of the classroom to prepare lessons, and that the backlog of school repairs would be cleared by 2010, if the Lib Dems won the next general election.
They supported the abolition of tuition fees, an improved salary structure for teachers and more money to monitor standards of nursery education.
The conference had already backed a plan to raise the basic rate of income tax by one pence and introduce a new 50 per cent tax band for those earning more than pound;100,000 a year.
Mr Willis used his speech to attack the Government's education record, saying education was in crisis. After 18 years of demoralising Conservative rule, Labour had actually made things worse, he said.
He also condemned the Tories' free schools policy which, he said, would reduce admissions to "utter chaos".
John Dunford, general secretary of the Secondary Heads Association, challenged the Liberal Democrats to fill the policy gap between Labour and the Tories. "I don't think the Lib-Dem policy is very clear at present," he said.