The government has accused local authorities of not setting high enough results targets for looked-after children.
Civil servants say they should aim for more 11-year-olds reaching level 4 in English.
Looked-after children do not perform as well at school as their peers, with 14 per cent achieving five good GCSEs in 2008 against a national average of 65 per cent. The 2010 target is 20 per cent.
Authorities predict that 52 per cent of looked-after 11-year-olds will reach level 4 in 2010 against 46 per cent last year.
The Government wants 56.6 per cent of looked-after children to achieve level 4 in English next year and 60 per cent by 2011.
Writing to authorities, Sue Hackman, chief adviser on school standards, and Sheila Scales, director of the early-years, extended schools and special needs group, say: "It is evident from the KS2 English targets set over the last two years that there has been a flattening off of ambition."
Authorities must review plans for delivering the best for these children, they add. These include a virtual headteacher (see box), designated teachers, one-to-one tuition and the Booktrust charity's Letterbox Club literacy scheme.
Authorities have set targets for looked-after 11-year-olds reaching level 4 in maths, and for 16-year-olds achieving five good GCSEs in line with national targets.
Clare Tickell, Action for Children chief executive, said: "We must hold the same ambition for looked-after children as we do for their peers. They often start at a disadvantage and we must fill the deficit - grades can be improved with support such as one-to-one tuition. Ambitious targets need to be driven by a clear strategy that sees schools and carers working together so they can reach their full potential."
The Department for Children, Schools and Families said: "We expect authorities to set ambitious, realistic targets for all children."
Children in 11 authorities who piloted a virtual headteacher have outperformed their peers, research has found.
Analysts at Bristol University pointed to the study's limitations - the small numbers involved - but added: "Our research provides a clear endorsement of the need in local authorities for a senior figure to champion the education of looked-after children."
Each authority received pound;70,000 per year for the two-year project.