Failing schools such as Hackney Downs, due to be closed next month, might be shown to be very effective if assessment took account of pupils' backgrounds and abilities on arrival.
Peter Tymms, director of a University of Newcastle project aimed at developing new methods of calculating schools' effectiveness, said Office for Standards in Education inspections were based on flawed methods which ignored the progress made by pupils - the value added.
He said that by comparing children's value-added scores with raw national curriculum data, the massive differences between the highest and lowest achieving schools disappeared, and some "failing" schools turned out to be very good.
Mr Tymms, director of the Performance Indicators in Primary Schools (PIPS) project, added: "Raw league tables are hopeless because they simply reflect where pupils were when they arrived at school, but schools are only responsible for the progress they make, not the level they come in at. One primary school we looked at which was deemed to be failing actually did really quite well in maths, and very well in reading."
Mr Tymms told a National Association of Head Teachers' primary conference in York at the weekend that PIPS, which the union had helped to fund, could provide extremely useful information.
The project, which tracks aspects of schooling as pupils move through primary school, could show whether children given homework did better than those who had none, differences in achievement between boys and girls and whether bright pupils were under-achieving.
The research, which began three years ago and has involved around 300 primary schools so far, also showed that OFSTED inspections could damage schools' performance, he claimed.
"We have demonstrated a high correlation between teachers' own, self-rated confidence in teaching certain subjects such as science and their pupils' achievements," said Mr Tymms, who is deputy director of the curriculum evaluation and management centre at Newcastle University.
"At the moment we have a system which deliberately picks out people who are not doing well and names them in public. This is bound to undermine their confidence and will actually lower standards."
Chris Woodhead, the chief inspector of schools, told delegates that although he accepted some teachers had to deal with children with a wide variety of social and emotional problems, schools could make a real difference in even the most deprived areas.
"People need leaders, a sense of direction . . . there's a real skill at the heart of headship," he said.