The Government should conduct an immediate review of the National Literacy Strategy to examine whether children would learn to read more quickly if they were taught using traditional phonics teaching methods, MPs said this week.
Differences in performance between schools revealed problems with the way primaries teach reading, the education select committee said.
Labour's claims to have delivered a sharp increase in literacy in primary schools was called into question by the committee, which is dominated by the party's MPs.
Improvements in 11-year-olds' literacy results are partly a result of teachers learning to "teach to the tests", it said.
Even if national tests are reliable, the 20 per cent of children unable to reach the expected standard is "unacceptably high", said the committee's report.
It called on the Government to commission a major research project to discover whether synthetic phonics, a traditional method of teaching children to read by teaching them building blocks of letters and groups of letters that represent individual sounds, would be an improvement on the methods promoted by the strategy.
Synthetic phonics is one of four "searchlights" used by the NLS to help children identify words.
The report, Teaching Children to Read, said: "Wide variation in the results achieved by schools with apparently similar intake . . . suggests that problems do exist, either in the implementation of the Government's strategies or inherently in the methodology it promotes."
Barry Sheerman, the committee's chairman, said research carried out in Clackmannanshire, Scotland, showed synthetic phonics may be more effective in helping disadvantaged children learn to read. "The most convincing evidence (that phonics first and fast may be more effective than the literacy strategy) is the stuff coming out of Clackmannanshire but if we believe in evidence-based policy, we need more research."
Weaknesses in teacher training that have left some teachers without an adequate understanding of how children learn to read also need to be addressed, he said.
The committee's findings undermine one of Labour's key education success stories in the run-up to the general election.
Primary national test scores in English rose sharply between 1997 and 2000 and, after a three-year plateau, rose again last year.
In 2004, 78 per cent of 11-year-olds reached the expected standard in English, compared to 63 per cent when Labour came to power. But MPs heard evidence from experts at Durham university and the Statistics Commission that this may overstate the improvement.
The Statistics Commission said: "The Commission believes it has been established that (a) the improvement in KS2 test scores between 1995 and 2000 substantially overstates the improvement in English primary schools over that period, but (b) there was nevertheless some rise in standards."
A Labour party spokesman said: "Our national strategy has a balanced approach to teaching reading. Synthetic phonics is already at the heart of literacy teaching but our view is that that should be complemented by teaching an understanding of grammar and context. Children should be able to understand what they are reading."