Almost three-quarters of primary PE lessons are rated as good or better and a third are very good, according to an Office for Standards in Education report.
The report is a boost for the Government's sports policy, which had come under fire from critics who claimed it concentrated too much on secondary schools.
Inspectors found that teaching had improved in both primaries and secondaries, with primaries making the biggest gains. But Ofsted's findings cast doubt on whether the improvements will be sufficient to meet the Government's target of two hours of high-quality PE and school sport for 75 per cent of pupils by 2006.
Outside specialist sports colleges, only a minority of schools offer two hours of PE each week within curriculum time.
Each school sport partnership is made up of a specialist sports college, up to eight other secondaries and up to 45 primaries who work together to improve pupils' access to sporting opportunities.
There are 100 such partnerships, each receiving an average grant of pound;270,000 a year.
Overall, 60 per cent of teaching in PE lessons and extra-curricular activities is rated as good or better.
But teaching is rated as unsatisfactory by Ofsted in one in five after-school and lunchtime clubs.
Inspectors also raised concerns about teachers' use of assessment.
"Pupils do not know what standards they are expected to reach by the end of the key stage or in many instances at the end of a lesson or unit of work," the report says.