SCHOOLS SHOULD receive a bonus of up to pound;6,000 for every pupil they teach from a disadvantaged background, according to the Conservatives' education policy review.
This would encourage top schools to compete for children who too often receive a poor education, the group says.
The recommendation is one of many under consideration by the Conservatives. They include radical changes to the testing regime, less paperwork for teachers and struggling children repeating the final year of primary school.
Baroness Pauline Perry, a former chief inspector of schools, and Stephen Dorrell, the former health secretary, who chaired the review, call for teachers to be given more of a voice.
They say that Ofsted should be called in only when schools and local authorities have failed to address problems.
A position of chief education and skills officer should be created to work in the Department for Children, Schools and Families to help officials understand what is happening in schools.
They also call for a new Royal College of Teachers to provide expertise in all areas of education.
"Labour's well-intentioned policies have failed: too many pupils are failing in schools and teachers have become demoralised by excessive target setting," said Baroness Perry.
The review comes as John Bercow, the Conservative MP, agreed to advise the Government on support for children with learning difficulties, as Gordon Brown attempts to create a government of "all the talents".
George Osborne, the shadow Chancellor, committed the Conservatives to matching government spending for the next three financial years until 2011.
Baroness Perry criticised the national testing regime, calling for the scrapping of AS-levels and fewer tests for 11- and 14-year-olds.
The recommendation is unlikely to be adopted by the Conservative front bench.
David Cameron has already indicated which areas of the review he supports. These include giving headteachers more say over exclusions, expanding the academies programme and setting by ability.
He has pledged to look at extra funding for disadvantaged pupils and supports remedial teaching for struggling 11-year-olds.
Baroness Perry said discipline and achievement were better in smaller schools. Where rolls are falling, larger schools should be closed and pupils driven to smaller ones in the suburbs, she said.
Steve Sinnott, general secretary of the National Union of Teachers, said: "I regret the report's proposals are predicated on the idea of a failed education system. I welcome, however, its proposals for a professional voice at the heart of government.
"The group has taken the welcome decision to question the current overblown regime of tests, targets and tables."