Ofqual has followed Scotland, Northern Ireland and Wales in deciding to use teacher-assessed grades for GCSEs and A levels in England after all this year.
In a sharp U-turn from education secretary Gavin Williamson's previous declaration that the use of teacher assessment "degrades every single exam result", the regulator announced this afternoon that GCSE and A-level candidates will be awarded grades assessed by their teachers.
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Ofqual chair Roger Taylor said: "We understand this has been a distressing time for students, who were awarded exam results last week for exams they never took.
"The pandemic has created circumstances no one could have ever imagined or wished for.
"We want to now take steps to remove as much stress and uncertainty for young people as possible – and to free up heads and teachers to work towards the important task of getting all schools open in two weeks.
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"After reflection, we have decided that the best way to do this is to award grades on the basis of what teachers submitted. The switch to centre assessment grades will apply to both AS and A levels and to the GCSE results, which students will receive later this week."
Mr Williamson apologised to students and parents affected by "significant inconsistencies" with the grading process.
"This has been an extraordinarily difficult year for young people who were unable to take their exams," his statement said.
"We worked with Ofqual to construct the fairest possible model, but it is clear that the process of allocating grades has resulted in more significant inconsistencies than can be resolved through an appeals process."
He added: "We now believe it is better to offer young people and parents certainty by moving to teacher-assessed grades for both A and AS level and GCSE results.
"I am sorry for the distress this has caused young people and their parents but hope this announcement will now provide the certainty and reassurance they deserve."
Paul Whiteman, general secretary of school leaders’ union the NAHT, said: “Having taken so long to make a decision, this was the only option that government had left to deal with the unfairness."
Geoff Barton, general secretary of the Association of School and College Leaders, welcomed the decision "to put an end to the grading fiasco".
"Students, parents and teachers will breathe a sigh of relief after days of confusion and dithering by ministers," he said.
"This decision will, of course, mean that there is grade inflation this year, but that is a small price to pay for remedying the manifest injustices produced by the statistical model used to moderate grades."
Ofqual had been awarding A-level and GCSE grades using its standardising process, based on a combination of schools' historical performance data, students' prior attainment and a rank order of pupils by grade and subject.
Teachers were asked to submit grades for the qualifications, but these were only used by the regulator for subject cohorts of 15 pupils or fewer.
The majority of grades were determined through the standardising process, which at A level resulted in 39 per cent of teacher-assessed grades being downgraded.
Critics saw the process as particularly unjust when it emerged that independent schools seemed to collectively benefit from how grades were allocated this year.
Private schools boosted their share of A and A* grades by 4.7 percentage points on the previous year, more than double that of any other type of school – attributable to their lower class sizes and greater likelihood of keeping teacher grades.
The process had been widely condemned as unfair, with Conservative and Labour politicians alike calling for a review of the system. Yesterday, Lord Baker, a former Tory education secretary, called for the publication of GCSE results to be delayed while A-level appeals were resolved.
Headteachers have also condemned the confusing communication over appeals after Ofqual published details of an A-level appeals process using mock exam results and coursework only to withdraw it hours later.