If successful the scheme will soon measure progress at every stage of a pupil's education, he told a meeting organised by three teaching unions.
Mr Blunkett said: "Once this is done we will genuinely be able to say to schools how well they have done considering where they started from."
From 2002 league tables will show which schools have given students the greatest boost in performance in the early years of secondary school and also during GCSE courses.
The performance tables will show how pupils' results changed by comparing test rsults taken at the end of primary school with test scores taken by the same pupils three years later as 14-year-olds.
David Blunkett believes that value-added measures will now be reliable because individual pupils can now be tracked through the system.
He was speaking at a fringe meeting organised by the Association of Teachers and Lecturers, the National Association of Head Teachers and the National Union of Teachers.
If the secondary "value-added" tables are a success they will be extended to primary schools two years later to show pupils' progress achieved between tests at seven and 11.
Mr Blunkett also announced that he would be consulting on proposed secondary school targets for 2004 and 2007.