The Government claims that 1 million people have a national vocational qualification. This is 300,000 more than could be traced by the most exhaustive study into the eight-year-old training programme.
The report, a draft of which has been seen by The TES, has prompted warnings of a disaster in the Government's training for work programme. It is likely to fuel calls for a further overhaul of vocational awards and throws into doubt the achievement of Government targets.
Ministers have invested considerable political capital in the workplace training schemes, claiming they have employers' support. But the report, by the London School of Economics and London University Institute of Education, flatly contradicts this.
Another key finding, which will acutely embarrass ministers, is that NVQ development costs appear to be twice the Pounds 79 million the Government has admitted to.
The research - funded by the Gatsby Foundation - has also revealed that the NVQ levels being reached are not as high as was assumed by ministers, the National Council for Vocational Qualifications, or the individuals who have taken them. Many people with awards equal to GCSE thought they had A-levels. Some had no idea they even had an NVQ.
Grave doubts now exist as to whether the national education and training targets can now be reached by the year 2000 and the pre-conference release of the report will mean red faces for Education and Employment Secretary Gillian Shephard and her ministers. It suggests they have enjoyed "successes" based on inadequate and misleading research.
The implications of the report will be analysed in BBC2's Money Programme on Sunday when ministers will find erstwhile supporters criticising them. These include John Capey, the man who headed the Government's review of general national vocational qualifications.
Dr Capey, principal of Exeter College, was removed from the NCVQ council by Mrs Shephard after his report was published, for failing to toe the party line.
The research was commissioned in the wake of the damning Channel 4 report All Our Futures three years ago. Alan Smithers, director of the centre for education and employment studies at Brunel University, was a leading critic on that programme.
Professor Smithers this week accused ministers of using misleading evidence for their political ends. "This initiative [NVQs] is a very important development that must be made to work. By looking at it through rose-tinted spectacles, they have failed to identify the necessary improvements."
The report raises questions about the value of earlier smaller-scale research on which ministers have based much of their evidence of success. It also challenges the way the NCVQ calculates progress.
Ministers knew of the new research and had seen drafts almost six months ago, senior Government sources confirmed to The TES in June. Senior civil servants in closed talks with advisers passed on ministers' concerns and warned that a fundamental rethink of NVQs may be needed. But ministers officially denied this in the letters pages of The TES, accusing the newspaper of concocting "dark conspiracies".
The findings reflect badly on the NCVQ. John Hillier, the chief executive, was reported by officials to be "spitting teeth" that the research was conducted at all.
The research also indicates that NVQs are still failing to take off in areas vital to economic success. Almost one in 10 (65,000) is in hairdressing.
Where the Government is taking steps to boost NVQs, it is heading for disaster, according to separate research by the Association of Colleges. In a paper this week, it backs up the Gatsby research by showing that employer take-up is extremely low and that the cost of trying to include real experience in the workplace would be too high.