There will be no special inspections to police the strategy and the Office for Standards in Education says it will only comment where literacy standards are poor.
Leading education lawyers say that schools are free to ignore the strategy because it has no legal status - providing that they already teach reading in a "reasonable" way.
Meanwhile heads' leaders have threatened court action if the Government tries to enforce "every dot and comma" through inspections.
Ministers have adopted an increasingly tough stance on the literacy strategy, which includes such innovations as the literacy hour. Official guidelines say that only a tiny minority of schools are free to ignore the strategy. This week Chris Woodhead, the chief inspector, announced he would be "monitoring" its implementation.
But this "coercive" approach has angered primary heads who argue that it is counterproductive and has damaged teacher morale.
David Hart, general secretary of the National Association of Head Teachers, said: "I will be writing to OFSTED in the near future warning them that if they attempt to treat guidance or policy which is voluntary as effectively compulsory, then we will challenge it, if necessary in the courts.
"The NAHT supports the literacy strategy. But this coercive element is counterproductive and is causing a great deal of anger among schools who are performing well."
He said the Government's bureaucracy working party has already agreed that voluntary guidance, such as the new homework recommendations, should not form part of OFSTED inspections. The same approach must apply to the literacy and numeracy strategies, he said.
Jack Rabinowicz, chair of the Education Law Association, said that the Government is opening itself to legal challenge. "You can't impose these things from central government unless they're provided for either by statute or by secondary legislation," he said.
John Friel, a leading education barrister, said: "Schools are free to adopt or ignore the strategy if they so wish - so long as those schools are acting reasonably according to a legal definition. If they reject the strategy and don't have an alternative in place, that's a different matter."
An OFSTED spokesman said: "If at the age of 11, children still have a reading age of eight or nine and the school has turned its face against the literacy strategy, they will be open to criticism.
"They won't be criticised for not following the literacy hour, provided their methods are equally effective. I guess the results will speak for themselves."