The Office for Standards in Education calls on schools and local authorities to do more to recognise and promote achievement among low-attaining pupils.
Setting targets for pupils with special educational needs says the Government should provide guidance to schools, setting out what should be expected of low-attaining pupils based on their age, ability and previous attainment.
It also backs proposals, set out in the Government's special educational needs strategy, to reform league tables to reflect a wider range of pupil achievement.
Ministers hope this will encourage schools to pay more attention to the performance of SEN pupils.
The Audit Commission, the public spending watchdog, has warned that the current system rewards schools which focus on improving the attainment of pupils whose achievements will boost their league-table standing.
Since 1998, all schools have been required to set targets for the proportion of pupils who reach the expected levels in national tests.
Special schools are required to set targets for progress below the expected level, but the same is not expected of mainstream schools, despite the fact that, according to inspectors, many are well placed to do so.
David Bell, chief inspector, said: "Setting challenging targets for pupils with SEN can help both pupils and schools focus their efforts and learning on achieving realistic goals."
But John Bangs, National Union of Teachers head of education, warned that targets should not be used to hold schools accountable for SEN pupils'
performance. He said: "Setting progress targets for individuals is fine, but using them for accountability purposes could discourage mainstream schools from accepting pupils with SEN."