A review of the secondary school curriculum in England is proposing new qualifications for all and tougher exams for the brightest.
Exams will be designed to allow the brightest pupils to stand out
The review, headed by Mike Tomlinson, says A-levels, GCSEs and vocational qualifications should be replaced by diplomas.
Core skills of "functional" maths and English would be mandatory, in response to employers' concerns.
"The time for reform has come. Too many young people leave learning or fail to progress. Too many are left unchallenged," said Mr Tomlinson.
'Unified, not uniform'
He said there would be those who opposed change, who for their own reasons would prefer little or none.
"We considered it was time for a thorough overhaul and system-wide change," he said as he published his working party's interim report.
But the changes - "evolutionary, not revolutionary" - would take perhaps 10 years.
The diploma was not a "one size fits all" solution.
"We are certainly proposing a unified system, not a uniform system."
Under the proposals, there would be a four-part interlocking structure:
Further up, youngsters could choose to move from "open" to more "specialised" diplomas.
- entry level
- foundation - equivalent to the current GCSE grades D to G
- intermediate - A* to C as it is now
- advanced, covering academic and vocational A-levels.
AS-levels would be spun off as totally separate qualifications.
A-levels might be re-graded, perhaps incorporating the current extension awards, from a five-point to a six or seven-point scale.
This would help universities to identify the most able pupils and tackle concerns that there are too with the highest grades - more than 21% of entries last year were awarded an A, which encompasses marks from 80% to 100%.
Four-level diploma to be introduced as new qualification
A-levels and GCSEs would be components
Pupils would learn at own pace and take exams when ready
Vocational options would be improved
The diploma could recognise other experiences, such as voluntary work
Coursework would be replaced by a single big project
Changes would be gradual - taking at least a decade
Progression through the four levels of diplomas would be at the speed that suited pupils - ability-related learning rather than age-related - so brighter children could move upwards more quickly.
This addresses complaints that for some able pupils, GCSEs are not demanding enough.
Coursework would be replaced by a personal project perhaps spanning a number of subjects, and demonstrating the ability to research and analyse - not necessarily written, it might for instance be a video presentation or something built.
There would be recognition for wider activities such as community service, Duke of Edinburgh awards and even sport.
The interim report also says vocational qualifications need to be less confusing and should be reduced in number to a maximum of about 20 main strands.
The School Standards Minister, David Miliband, said the review aimed to reduce the burden of too many exams, improve vocational education and stretch more able pupils.
"It is right to seek a system that is appropriate for the 21st century," he said.
The National Association of Head Teachers welcomed the proposals, saying that "reform is long overdue".
The Confederation for British Industry, which has spoken against scrapping GCSEs and A-levels, welcomed the effort to reduce the number of unqualified school leavers.
The Conservative Party offered a "cautious welcome" to proposals such as cutting coursework, but warned that the transition to a diploma could cause difficulties.
Much of what is in the report is "work in progress" - presenting options about how the new diplomas might be graded, for example.
Everyone is being invited to have their say. A final report is due in the autumn for ministers' consideration.