Ontario's ministry of education is back-tracking on a requirement that students must pass a reading test in order to graduate from school.
Since it was introduced three years ago, 20,000 students a year have failed the five-hour, high-stakes test, which is taken in grade 10 - two years before graduation.
Now students who fail the reading test will still be able to graduate, if they pass a compulsory, continuously assessed English course in grade 12.
"The government of Ontario believes that no child should be left behind," said Dave Ross, a spokesman for the state education ministry. "This is a plan to make sure students who struggle will get the help they need to graduate."
The new course will allow students to develop a portfolio of work demonstrating their literacy.
Barry O'Connor, a school board director who chaired the working group that recommended the new course, said its curriculum was still being written, but a variety of methods of assessment would be used.
"We believe that since the course is needed to graduate, students will be motivated to pass it," he said. But even those who failed and could not graduate would benefit, he said. "It will give them a portfolio that they can take to prospective employers and show what they can do, so that they can get jobs."
But critics have accused the government of dumbing down standards and risking allowing functional illiterates to graduate, because there was no guarantee that portfolios were students' own work.
Gerrard Kennedy, the Liberal spokesman for education, dismissed the government's U-turn as an attempt, just weeks before provincial elections, to head off lawsuits from thousands of parents who did not see why their child should not graduate because of one test if they had passed all their other courses.
"It's a political safety valve for the thousands of kids who have twice failed the test but who have received no special literacy training," Mr Kelly said.
"Since its inception the Government has had no idea what to do with the results of the test."
However, the ministry's change of policy has been welcomed by teachers in the state.
Phyllis Benedict, president of the Ontario Teachers Federation, said: "We have long had concerns about the emphasis on standardised testing, because not all students learn or can be evaluated in the same way. To seriously jeopardise a child's future on the basis of one test is not wise."