The Prime Minister's remarks, made to a conference of teachers in Essex, have added to the pressure on councils, who now face take-overs if judged to be failing.
Mr Blair was at Moulsham high school, Chelmsford, to discuss the Government's pay proposals, along with Education Secretary David Blunkett and standards minister Estelle Morris.
"We either get this education system sorted out or, if we have a second-class education system, we will have a second-class country," said Mr Blair.
"I think far too many of them just muddle along with things. We need a far more acute analysis of what is needed in schools," he said. "We all know schools in exactly the same social position that differ widely in their performance."
Earlier Mr Blair had outraged teachers by appearing to suggest parents should shun inner-city schools in an interview on Radio 4's Today programme.
The Prime Minister's visit to Moulsham was the first of a series of consultation "roadshows" on the Government's reforms which include a new "fast-stream" for young high-flyers and performance-related pay increases for the rest of the profession.
He had some good news, announcing a pound;60 million bonus for staff in about 8,000 fast-improving schools.
Questions from the teachers raised worries about whether the money for increased pay would materialise; the danger of branding teachers who did not get into higher wage brackets as failures; and the workload that appraisal for performance-related pay would impose on the profession.
After Mr Blair's departure, Liz Clarke, a maths teacher at the comprehensive, said the banks of TV lights had got in the way of a proper discussion of the issues "It would be much more beneficial to sit around a table and talk without the media there. None the less, I felt Mr Blair was genuinely committed to education."
Alice Clay, a 24-year-old history teacher, felt encouraged. "The changes offer younger teachers exciting opportunities and the critical challenge now is to sort out fair appraisal procedures to measure performance and make sure the reforms do not exclude older teachers," she said.
Terry Flitman, deputy head of nearby Moulsham junior, remained sceptical:
"My question is: 'is there anything here to bring up morale? Is there anything to pick teachers up from the bottom?' I am still waiting for that."