Schools have been set a minimum threshold for GCSE results
The poorest-performing secondary schools could be closed or turned into academies if they do not improve, under plans to be announced this week.
This threat to improve or close affects more than half the state schools in cities such as Manchester and Bristol.
The government is targeting 638 schools in England in which less than 30% of pupils achieve at least five good GCSEs including English and maths.
Local authorities will be given 50 days to produce a rescue plan.
This National Challenge, to be announced on Tuesday, will offer extra funding, specialist advice, assistance from experience head teachers and the involvement of neighbouring schools.
The intention is to have no schools with such low exam results by 2011.
But the National Union of Teachers has called on the government to scrap the closure threat and not to stigmatise these schools as the "poorest performing".
Some 134 out of the 150 local authorities in England have been told to produce the detailed plans for specific schools located in their areas by the Department for Children, Schools and Families (DCSF).
In authorities, such as Sandwell, Bristol and Hull, more than half of state secondary schools are in this category.
In Manchester, there are 13 state schools currently below this minimum threshold.
Schools in the most deprived local authorities will receive £10,000 in extra funding to pay for trips to cultural events and recruiting people from local communities to act as mentors.
Mr Balls said: "Each of these schools faces different challenges in getting up to and over 30%.
"That is why I am asking local authorities for a specific plan of action for each National Challenge school by the end of July, so that we can be confident that all of them will succeed.
"Every National Challenge school will get its own package of extra support and extra funding to help them improve pupils' results.
"But I will not hesitate to challenge local authorities to do more for their local schools where bigger changes or faster improvements are needed."
The creation of independent academies is one of the central ideas of the government's drive to improve struggling schools, particularly in challenging inner city areas.
Ministers plan to have 200 academies open or in the pipeline by 2010, seeing them as a key way of improving schools. They aim ultimately to open 400 in England.
The Conservatives have said they would expand the number of academies in England in an attempt to tackle under achievement in deprived areas.
Shadow children's secretary Michael Gove said: "It is not just 600 schools at the bottom which give cause for concern.
"There are hundreds more where fewer than half the children get five good GCSEs and as a nation we are falling behind.
"The government has no answer other then more bureaucracy and targets and they have no plans either to restore rigour to exams or freedom to professionals."
Liberal Democrat Children's spokesman David Laws said the announcement was more about distracting attention from a failing government than dealing with failing schools.
"How is Ed Balls supposed to be taken seriously when he pops up 11 years into a Labour government to tell local authorities that they have just a few weeks to draw up plans to turn around schools which often have very deep seated problems?"
John Dunford, general secretary of the Association of School and College Leaders, said it was "entirely wrong" for the 638 schools highlighted to be described as failing, as many were on "a rising tide of achievement".
He said: "A high proportion of them work in the most challenging communities in the country and, even though they have not reached 30% with five high-grade GCSE passes, many already add enormous value to children's achievement."