Teenagers taking A levels will face tougher questions under a pilot scheme later this year designed to help distinguish between outstanding pupils and the merely very good.
A new A* grade at A level is likely to be introduced for sixth-formers who get marks of 90 per cent or higher in their exams because so many now score As, the Government says.
Schools Minister Jim Knight argued that the reforms would provide "finer tools" to identify the best students and stretch them further. He condemned critics who argued that the exams had been dumbed down, claiming that they wanted to return to an earlier era when grading was "unfair".
Mr Knight said: "Rising standards are not the symptoms of a flawed system, they are a reflection of success. But as more students do well, it does mean we need finer tools to measure the precise performance of the best performers and stretch them even further."
The pilot of tougher questions and extra top grades, overseen by the Qualifications and Curriculum Authority, will begin in schools in England from next month for students taking their exams next year. Ministers want to introduce the changes nationwide in 2008.
The QCA, which regulates the exams system, wants the tougher questions to be part of the main exam papers.
But Ministers have expressed concern that this would change the "standard" of the exams and argued that the questions should be in optional extra sections of the papers. But this could lead many schools to choose not to prepare students for the extra questions, undermining the point of the reforms.
Mr Knight defended the current exam system.
He said critics who equated rising pass rates with dumbing down were not only doing young people a disservice, they were taking a simplistic view of the system.
"It is true that today more people get As than did so 20 years ago," he said.
"But this is because 20 years ago there were quotas for the number of grades awarded at each level and 30 per cent of A level entries were doomed to fail. The simple question is, should the exam system reward people for what they have achieved, or act as a filter to reduce the number of people who can achieve a particular grade?
"My view, and I believe that of students, parents, universities and employers is that exams should measure success - not put a cap on it."
Mike Creswell, director general of examinations board the Assessment and Qualifications Alliance, told the Independent on Sunday: "I was concerned about the impact of an A* grade on a good grade A performance.
"But, I believe we do have to start thinking about providing assistance to universities for those highly popular courses which are oversubscribed. I would now be happy to move towards an A* grade.