The rebuttal from Lord Adonis, schools minister, came after several newspaper reports on Monday suggested that the Qualifications and Curriculum Authority was advising this approach.
The Sun labelled the move "the latest potty idea on schools. But the press appears to have made a strange reading of the guidance, published by the QCA in July. It set out an approach used in many schools for years based on assessment for learning.
Teachers, it said, should ask learners to write their own questions on a topic, having given them a set of learning outcomes which the questions would assess.
Pupils should then, in groups, write five questions and, following whole-class discussion, select the two best from each group. They would then be asked to answer these for homework. There was no suggestion that a teacher would not be in control of this process.
In a letter to the Daily Express, Lord Adonis said it was "absurd" that teenagers would be setting their own homework and deciding what their tests should cover.
The QCA said: "There is nothing new in teachers helping pupils to set their own goals and review progress. This is good assessment practice as part of day-to-day teaching."
Paul Black is emeritus professor of science education at King's College London, and co-author of Inside the Black Box, the seminal text on assessment for learning on which the QCA guidance drew.
He said research had shown that pupils who were asked to think of questions which they could be set in exams and who were then set a test with a different set of questions, did better than those taught conventionally.
He said: "Setting the question yourself makes you think about the purpose of the exercise. If you are to become an independent and active learner, you have to learn how to regulate your own learning."
Dr Bethan Marshall, another member of the Inside the Black Box research team, said teachers were not taking a back seat.
"It's about kids taking control of their learning," she said, "but under guidance from their teacher."