Tony Blair has outlined plans to give secondary schools across England more freedom from local authorities.
The "pivotal" and "irreversible" reforms would create independent state schools "driven by the needs" of pupils and parents, the prime minister said.
Local education authorities would have less power, while parents would have more say over schools, he added.
Deputy prime minister John Prescott is among those reported to fear the plans will disadvantage the poorest pupils.
Public school-educated Mr Blair said he had been lucky enough to have "a very privileged education", during his speech to parents in Downing Street.
He said he wanted to raise standards in secondary schools, saying he wanted "a system of independent, self-governing state schools with fair funding and fair admissions".
Full details of the plans are to follow in a White Paper, to be published on Tuesday.
It is expected to allow schools, not councils, to decide how pupils are selected and the courses and teaching methods they offer.
But Mr Prescott fears the plans will see the poorest pupils paying the price for making schools independent and giving parents more choice.
BBC education correspondent Mike Baker said the reforms would see the majority of schools becoming "trust" schools.
These would have the "freedoms of city academies and a more arm's-length relationship with local councils", he said.
They could be backed by businesses, faith organisations and parents groups.
Under the plans, local education authorities would have a more strategic role, monitoring standards and commissioning services rather than running schools.
The paper will also see transport subsidies for poorer pupils and school choice advisers to help parents select schools.
They would also make it easier for independent groups to open state funded schools.
Public school ethos
Mr Prescott has questioned whether the 17 new city academies championed by Mr Blair have raised standards.
He is said to be worried about plans to bring some of the ethos of public schools to the state sector.
Sunday's Observer newspaper quoted a Whitehall source explaining Mr Prescott's fears about how expanding choice could affect working class families.
"He is scared nice schools that are doing very well will expand and do well, but will leave more and more other schools to close and on the way to closure they will have all the problems of a failing school," the source said.
Earlier, Education Secretary Ruth Kelly played down reports of a Cabinet revolt over the plans. She said: "Whenever flagship policies are developed there is going to be debate within the government."
Shadow education secretary David Cameron said the government was effectively reintroducing grant maintained schools, which were created by the Conservatives and abolished by Labour.
He said his party would back the plans, adding that "the one size fits all comprehensive isn't working".
But he told BBC Radio 4's Today programme the prime minister had "effectively wasted eight years through being timid and not reforming education properly and only now at the twilight of his premiership is he actually taking the steps that we've pressed him to take for so long".
Ed Davey, the Lib Dem education spokesman, said schools needed freedom from Whitehall, more teachers, reform of the curriculum and for the pupil-teacher ratio to be reduced.
Ex-Labour education secretary Baroness Morris said she agreed that head teachers should have the right to manage their own schools.
But she argued that Britain's most successful schools should federate with mediocre schools, giving them the leadership expertise they need to raise their standards.