But it was denounced as "creeping selection" by campaigners launching a national drive in favour of comprehensive schools.
By 2002 the aim is to have 500 specialist schools, choosing pupils by "aptitude" rather than "ability". The current total is 330.
In addition, the Government is putting up more cash - up to Pounds 20, 000 per school - to help them to link up with neighbouring primaries and secondaries.
"Specialist schools are a crucial part of the agenda for school improvement, " said schools minister Estelle Morris, announcing the expanded scheme. "The programme is about modernising the comprehensive principle. It allows schools to play to their strengths and to use a particular area of the curriculum as a focus for a rigorous approach to school improvement, benefiting all their pupils."
Any secondary school can apply for specialist status - but has to raise Pounds 100,000 business sponsorship to gain the same amount in Government capital plus pupil-related grants.
The additional money for developing local links could be used to support specialist classes or staff development in other schools.
Specialist schools would be able to select up to 10 per cent of their intake by "aptitude" for their specialism.
This was vigorously opposed at this week's launch of Say NO to Selection, the movement against grammar schools co-ordinated by the Campaign for State Education (CASE).
Some 300 parents and teachers at the rally in London were told that specialist schools are a form of "creeping selection."
The case to abolish England's remaining 166 grammar schools, which select pupils solely by ability, is now "overwhelming and irrefutable," the rally was told by former deputy Labour leader Roy Hattersley.
"The little boys with violins and the little girls who take music lessons and take their places in selective schools are the same children who are coached to win grammar school places through the 11-plus.
"Do parents really want to take a 6:1 risk that their child may fail the 11-plus and be sent to a school the wrong side of an educational apartheid?" asked Mr Hattersley.
Eamonn Norton, head of St Peters primary in Sittingbourne, Kent - which still operates the 11-plus system - claimed 90 per cent of Kent primary heads opposed a system which offered "no scope whatsoever for potential".
Jonathan Shaw, MP for Chatham and Aylesford, said Kent now had some of the country's worst performing schools as a result of bright pupils being "creamed off under this crude educational relic".
CASE has pledged to use new legislation to close England's last remaining grammar schools.