Sir Rhodes Boyson, a former education junior minister, is calling for the school leaving age to be lowered to 14.
In a speech to be delivered later this month to a conference of the right-wing National Council for Educational Standards, he will argue that "school for many 11-year-olds is a five-year sentence". Non-academic pupils, provided they pass a basic literacy test, should be allowed to leave at 14. His views were echoed this week by Mr Peter Dawson, general secretary of the Professional Association of Teachers - the teachers' union considered to be closest to the Government in its thinking.
Mr Dawson said the money saved would fund a massive investment in nursery education.
Sir Rhodes will urge the NCES members, many of them Tory activists, to continue agitating for a break-up of the state education system. He will tell them that a "nationalised education system cannot work" and that all schools should be free to operate on the open market.
In common with many on the Conservative radical Right, Sir Rhodes believes that party moderates have been "seen off" and that little now stands in the way of a total transformation of the education system. They point to Mrs Thatcher's insistence that "most" schools will opt out of LEA control as proof of her intent to revolutionise the system.
Party moderates, grouped around the Conservative Education Association, fear Mr Baker has lost the initiative to the right and that his bill, unless significantly modified, could lead to a fall in educational standards.