The end of the era of the "bog-standard comprehensive" was forecast yesterday as Prime Minister Tony Blair announced plans for a radical shake-up of secondary schools.

Private companies will be allowed to help run successful as well as failing schools and there will be a drive to raise standards between the end of primary school and the start of GCSEs.

Other schools - including fee-paying schools - could be allowed to manage comprehensives in future, a senior minister indicated.

The Prime Minister said the past four years had seen a "step change" in primary schools and he wanted a similar improvement at secondary level.

His official spokesman insisted that the Government remained committed to the comprehensive principle that every child was entitled to a decent education. But he said: "The day of the bog-standard comprehensive school is over."

Under the proposals published in a Green Paper, Schools: Building On Success, the Government hopes to encourage more graduates into teaching by writing off student loan debt for some trainees and enabling them to train while doing their first degrees.

Teacher unions gave the proposals a mixed response, with some warning that Labour ministers were set to preside over a big expansion of selection by ability, grammar-school style.

Unveiling the four-point, five-year plan for the "post-comprehensive" age, Mr Blair and Mr Blunkett were keen to stress that state schools should continue to educate people of all abilities, while stretching the brightest.

With that in mind, the first point of the plan was for an academy for the brightest youngsters in England to be created, Mr Blunkett told the Commons. The National Centre for Gifted and Talented Youth will be modelled on the US Centre for Talented Youth, at a university in Maryland.

Second, the Government would experiment with truncating Key Stage 3, which covers the three years between the start of secondary school and the beginning of GCSEs, into two years to prevent adolescent attention drifting.

It would also test whether some pupils should be able to do certain GCSEs a year early, something that is common practice in private schools.

The third point would involve expanding vocational GCSEs and giving schools more flexibility in teaching the national curriculum.

The fourth element would mean giving schools more freedom by cutting red tape and allowing heads more scope to set staff pay and conditions.

Earlier, Mr Blair told a seminar of headteachers and other leading educationalists that diversity "must become the norm, not the exception".

As revealed earlier, plans to tackle teacher shortages include offering graduate recruits in subjects such as maths, science, modern languages, technology and English the chance to have their student loans paid off