Education Secretary Alan Johnson has revealed he favours plans to introduce a tougher top grade in A levels.
Mr Johnson said a new A* grade would help identify the most outstanding candidates.
He also backed calls from the Qualification and Curriculum Authority for a shake-up of coursework, including more supervision by teachers.
It was reported over the weekend that there would be major changes to A levels by 2008.
An A* grade could be introduced after high numbers of pupils got A grades at A level last year and following complaints from universities that they could no longer distinguish between the best applicants and those who were "merely well drilled".
Dr Ken Boston, chief executive of the QCA, said: We could introduce an A* either by a fixed percentage each year or by setting a new benchmark of, say, 90 per cent."
The QCA is awaiting approval from Mr Johnson for proposals to scrap coursework in some A levels and to place tight restrictions on it in others. Concerns have been expressed that the exam has been devalued by big increases in the number of top grades - last summer almost a quarter of A-level examination papers were given an A grade.
This year's results will be released to more than 250,000 students in a month's time.
Mr Johnson said yesterday: "Children are doing much better at A levels and the concern amongst employers, universities, parents and teachers is how to discern when so many pupils are receiving the top A grade at A level."
He rejected claims that A levels were becoming easier, adding: "People are working harder."
Turning to coursework, Mr Johnson said the main issue was the availability of ready-made essays and other information on the internet.
"There is a concern that it can just be copied out so the pupil hasn't really got a firm understanding," he said.
"Coursework has played a role throughout educational history but I think we have to keep abreast of what is happening.
"The growth of the internet in particular is where this causes a concern."