The vast majority of comprehensives in England will become specialist schools within three years, according to predictions.
Specialist schools have achieved better GCSE results
Under the flagship scheme, schools have to raise £50,000 before bidding for specialist status in areas such as science, the arts or sport.
If successful, they get a one-off grant of £100,000 and then an extra £126 per pupil for four years.
The Specialist Schools Trust (SST) estimates there will be 2,963 specialist schools by 2006 - representing 93% of eligible secondaries, which must have more than 500 pupils.
The government claims the policy will increase overall standards.
SST chief executive Elizabeth Reid, said: "Specialist schools are succeeding in raising standards.
"They work together, and with aspiring specialist schools, to share good practice and this is having an impact on the quality of education they provide for young people."
In 2002, 54.1% of specialist school pupils gained five A* to C grades at GCSE, compared with 46.7% elsewhere in the state sector.
But critics say specialists are divisive and elitist, as they get more taxpayers' money than comprehensives, dubbed "bog-standard" by the Prime Minister's official spokesman.
The SST predicts 500 schools will be successful in their bids for specialist status each year until 2006. This year, it received 781 applications.
Currently, 1,463 schools have the status.
Specialist schools are expected to involve companies and community groups in their setting-up and running.
They date back to the creation of business-sponsored City Technology Colleges in the late 1980s.
The first to be given that label appeared in 1994. When Labour came to power in 1997 it decided to expand the programme to improve standards.
Last month, the Co-op said it would give £500,000 to help set up and run six specialist business schools, in an effort to make pupils more "honest and responsible" in their future dealings.