The number of teenagers failing their GCSEs will soar as a government drive to raise standards makes the exams harder, education chiefs have warned.

Candidates will not be awarded a C grade or better unless they pass new “functional skills” tests in English and maths under moves designed to ensure pupils master the three Rs.

But England’s biggest exam board - AQA - warned a generation of teenagers would suffer a “grave injustice” when GCSEs become more difficult as a result.

Pupils will struggle to compete for jobs and university places against school-leavers who achieved better grades in previous years, the board said.

AQA deputy director general Andrew Bird said the functional skills tests would effectively “change the standard” of GCSEs.

“From our modelling, it will suppress the pass rate at A*-C at GCSE,” he said.

This suggests that many pupils currently achieve Cs without mastering what the Government believes are “the basics” of literacy and numeracy.

In written evidence to the Commons schools select committee, AQA said reforms were “a major concern”.

The significant “change in GCSE standards” in English and maths would distort school league tables, the board said.

“More important, however, is the potential for very grave injustice to be done to the young people affected, as they compete with those from the year before for the same jobs and places in further and higher education.”

From 2010, ministers want GCSE-level courses in English and maths to cover “functional skills” - the basics needed for work and everyday life.

These are likely to take the form of separate tests that pupils will have to pass in order to be awarded a grade C or higher in their GCSEs.

The board said: “Our research into the potential impact of this ’hurdle’ suggests a major risk that there will be a significant consequential reduction in the number of students achieving success at grade C or better in these GCSEs, particularly in English.

“Of course, it could be that the situation will be different in practice when the new GCSEs in English, mathematics and ICT are first certificated in 2012.

“Levels of achievement in the functional skills will, hopefully, have improved significantly as a result of a strong emphasis on their teaching and learning in the intervening years.

“This is clearly the intention of the policy involved.

“However, the policy will require significant investment and careful monitoring of its success in order to ensure that GCSE standards can be maintained when the functional skills ’hurdles’ begin to operate in 2012.”

The introduction of functional skills follows employers’ complaints that even well-qualified school-leavers lack basic skills in maths and English.

To pass the functional English skills test, pupils will be expected to spell properly and use correct grammar and accurate punctuation, with apostrophes and commas.

They will also have to master reading, listening and speaking skills, through giving clear presentations, responding to letters of complaint and taking part in discussions.

For functional maths, pupils will be expected to understand fractions and percentages, find the area, perimeter and volume of common shapes, and use metric and imperial measures where appropriate.

A spokesman for the Department for Children, Schools and Families said functional skills would not make GCSEs harder.

“This will simply ensure that along with good subject knowledge, pupils must also show that they have a strong grasp of the basics in order to get a good grade,” he said.

“Functional skills does not mean making GCSEs easier or harder.

“It means testing how pupils can apply a range of subject knowledge - for example, both knowing how to work out compound interest as a paper exercise, and understanding how to apply that to a business loan or a mortgage.”