Exam boards got January's English GCSE decisions wrong because they "graded generously", but June's controversial lower than expected grades were correct and will stand, Ofqual has concluded.
The watchdog says that due to the "strength of feeling" exam boards have agreed that pupils who completed the new English GCSE qualification in June will be offered the chance of an "early re-sit".
AQA, the largest board, said these would be free and will take place in November.
But that is unlikely to satisfy schools who say pupils have suffered because of when they took an exam and who fear they will miss crucial government GCSE floor targets as a result.
Brian Lightman, Association of School and College Leaders general secretary said that something had gone "very, very wrong" with the system and legal action was still being considered.
"There has been a systemic failure over the awarding of English GCSE grades," he said "It was well known that the introduction of this kind of specification required major adjustments to the awarding process and I am astonished that these changes were not put in place.
"It is wholly unacceptable to leave the students and their teachers to pick up the pieces of a problem they did not cause. These changes implemented mid-year, without valid and reliable processes, must be reversed.
"It is not acceptable or practicable to make the students re-sit examinations."
The watchdog's interim report into the grading controversy attributes boards' generosity in grading the exams set in January to them having "less data and information to work with".
But it has stated that "it would not be appropriate" to revisit the boundaries that were set then. It acknowledged that doing so would mean lowering pupils' grades which "could lead to further concerns over unfairness".
Ofqual chief regulator Glenys Stacey said: "People were particularly concerned about the June grade boundaries. We have found that examiners acted properly, and set the boundaries using their best professional judgement, taking into account all of the evidence available to them. The June boundaries have been properly set, and candidates' work properly graded.
"The issue is not the June, but the January boundaries. Again, examiners used their best judgement in setting these boundaries, but they had less data and information to work with. Most candidates were not sitting at the time, they were waiting for June, and because they were new qualifications, examiners could not rely so much on direct comparisons with the past. As a result, those grade boundaries were set generously."
Ofqual has found that schools were "understandably" over reliant on the incorrect grade boundaries set in January when setting their expectations of June's results.
The AQA exam board, which has come under most fire during the controversy, said it was reassured that Ofqual had it "followed the correct procedures and awarded the right grades".
"However, I know this news will provide little comfort to the students and schools who did not get the results they were expecting," AQA chief executive Andrew Hall added.
He said that schools "may want to reconsider requests for re-marks, which look at marking accuracy rather than grade boundaries, in the light of Ofqual's findings". Any that did so would not be charged for their initial requests if they withdrew them by September 7.
Ofqual will meet with ASCL and the NAHT next week to show them their evidence.
Labour shadow education secretary Stephen Twigg said Ofqual's report had failed to address a "basic unfairness". He added that the whole row "raises really important questions about the credibility of our exam system" and called on education secretary Michael Gove to make a statement to parliament on Monday.