The UK has slipped down the international education league tables because the number of pupils leaving school with basic qualifications has failed to improve, a major study found today.
The Organisation for Economic Co-operation and Development warned that the social divide between people with five good GCSEs and those without has widened alarmingly in Britain.
Since the 1960s, the UK has fallen from 13th place among the 30 OECD countries taking part in the study to 22nd place in the table showing the proportion of pupils with GCSE-level qualifications.
Korea, by contrast, was 24th in the 1960s but ranked first in 2003, the most recent year studied.
The Department for Education and Skills insisted that the figures related to people who left school in 1994, so "have nothing to do with what schools are achieving now".
Andreas Schleicher, head of the OECD's indicators and analysis division, said Britain had simply not improved as fast as many other countries. "I acknowledge that there has been some progress in the UK but I would see that as a picture of stagnation," he said.
Britons who fail to get these basic qualifications are much more likely to be unemployed or earn considerably less than those in other countries, he said.
"Why is it so important to reach these baseline qualifications? Because the consequences of not reaching the threshold are very severe," he said.
Just 62 per cent of British men without five or more good GCSEs are in work, 11 points below the OECD average of 73 per cent. The UK employment rate for women without five good GCSEs was even lower at 47 per cent, compared with the OECD average of 49 per cent.
The OECD's annual Education at a Glance report said that for those who make it to university in the UK, the financial rewards in terms of higher salaries are much greater than in most other countries and fewer students drop out. It said the rapid growth in numbers of students going to university in the UK during the 1990s has now "levelled off". Its entry rates to universities are now well below the OECD average.
The report also showed the high levels of investment in schools in the UK, much of which has come from "private sources".
"The UK stands out in investing more than any other country per child at the pre-primary level, even though participation in pre-primary education has also been increasing," it said.
A comparison of 30 countries in the report puts UK secondary teachers ninth in a league table of pay.
Bill Rammell, lifelong learning minister, said: "The figures relate to data provided in 2002 and earlier and we anticipate that our position will improve even further as our latest education performance features in future comparisons," he said.
"One of the biggest and most immediate challenges facing us in the coming years is, therefore, to encourage more teenagers to stay on in education.
We remain concerned that the skills levels of our school-leavers are too low and we are determined to take the necessary steps to ensure that we can satisfy the rising and changing demand for skills."