Education Secretary Michael Gove has sparked a major coalition Government row over plans to axe GCSEs and bring back O-levels.
The Liberal Democrats only learned about the Conservative minister's radical shake-up of the exams system when revealed by a national newspaper yesterday morning.
There was also widespread anger from the teaching profession about replacing GCSEs with O-levels in traditional academic subjects such as English, maths, the humanities and science.
Dan Rogerson, Liberal Democrat MP for North Cornwall, and the party's education spokesman, warned of "harking back to an age when children started their adult life with qualifications that were seen as second-rate".
Fiona Westwood, South West regional organiser of the NASUWT teachers' union, said: "The proposed return to the two-tier system of some pupils sitting one exam and some sitting another is a recipe for social division in local communities."
But Tory backbenchers welcomed the proposals, which are likely to please critics who say exams have become too easy and cause school leavers to be ill-prepared for work.
George Eustice, Conservative MP for Camborne and Redruth, welcomed moves towards a "credible and robust exams system".
Summoned to the Commons to give an urgent statement after the revelations, Mr Gove claimed the current education system had created a "race to the bottom", adding: "We would like to see every student in this country able to take world-class qualifications."
The proposals could see less able pupils taking simpler qualifications similar to old-style CSEs and the end of the national curriculum.
According to leaked documents seen by the Daily Mail, pupils would begin studying for "explicitly harder" O-levels from September 2014.
Pupils will begin sitting the new O-level exams from 2016, with papers set by a single examination board to provide a "gold standard" test across the country. Less able pupils will sit simpler tests in English and maths in order to provide them with "worthwhile" qualifications.
In order to encourage schools to adopt the new exam, the requirement that pupils should seek to obtain five good GCSEs graded A* to C will be abolished leaving them free to take the new O-levels.
Critics say the creation of GCSEs in the 1980s led to a collapse in academic standards through grade inflation and a proliferation of "Mickey Mouse" courses.
The Lib Dems were yesterday furious at the revelations, insisting they would not be allowed to go ahead and arguing that a "two-tier" system like that of the 1950s would emerge. They claimed no-one outside of Tory Cabinet minister Mr Gove's office knew it was being considered.
Lib Dem Mr Rogerson said: "A two-tier system, with all the upheaval and instability this would cause, is not the way to achieve higher standards across the board.
"Reform needs to be managed carefully and we should avoid creating a huge amount of turbulence and distraction in the education system for no real gain.
"Rather than harking back to an age when children started their adult life with qualifications that were seen as second rate, we want to look forward and work with teachers and schools to give them the freedom and tools needed to stretch pupils, drive up standards and entrench a culture of high expectations in every school."
Ms Westwood, of the NASUWT union, said young people sitting GCSEs now have already been "written off" by the Government.
She went on: "To do this to a generation of our young people in such a cruel and cavalier fashion contradicts all good educational practice.
"The proposals would feed local tensions and sends out all the wrong educational messages when we should be doing all we can to promote an integrated and equal society for all. GCSEs are much better able to assess all young people using a variety of methods that allow all their skills and knowledge to be adequately demonstrated."
But George Eustice, Conservative MP for Camborne and Redruth, said: "If we want to give our young people the best possible start in life and compete with the rest of the world we need a credible and robust exams system.
"The evidence is clear that there has been a gradual drift towards grade inflation, so it is right to look at this area."
Ben Bradshaw, Labour MP for Exeter, said: "I did O-levels and A-levels – yet the young people I meet and work with today seem to know a lot more than I did at their age and are generally more able and better rounded people.
"I'm all for standards and rigour in exams, but am not convinced that you can separate people at 13 or 14."