The education watchdog Estyn has found the gap between best and worst performing schools in Wales has widened.
Dr Bill Maxwell at St. Joseph's RC High School in Tredegar
Around 10% of schools are "clearly not doing well enough", according to the new chief inspector of schools in Wales, Dr Bill Maxwell.
The numbers of schools needing special measures or big improvements had almost doubled to 16 over the year.
Education Minister Jane Hutt announced a framework to tackle low standards.
Estyn's report covers education in Wales from nursery to college level, although it does not inspect or report on universities.
Estyn's recently appointed chief inspector Bill Maxwell praised the overall improvements in teaching when he unveiled the report at St Joseph's RC High School in Tredegar Park, Newport.
"The picture for 2006-07 is positive in many respects," said Dr Maxwell.
"But although standards have improved in many sectors of education, the way in which education and training is provided must continue to be transformed if learners in Wales are to match the achievements of the best performing countries in the UK and abroad."
He said the gap between the best and the worst was getting larger.
Other schools were "very close" to entering the formal category of "causing concern" and overall, around 10% of schools are clearly not doing well enough.
Estyn also identified 16 schools as needing special measures or significant improvement, almost double the number identified last year.
Some councils did not focus their support on underperforming schools at an early enough stage to prevent them becoming a cause for concern, said Dr Maxwell.
Two thirds of council services inspected were judged to have uncertain prospects for improvement.
A Welsh Assembly Government spokesperson said it was "great" to see improvements in most areas of education and training, but they had to be built on.
There was a "lot to be positive about", with primary schools exceeding targets, but they were "obviously concerned" about the gap between the best and worst schools in Wales.
"Our new school effectiveness framework, through the sharing of good practice will certainly play a role in narrowing this gap and will ensure that all children and young people have access to first class education."
Meanwhile, Education Minister Jane Hutt unveiled a framework to narrow the gap in school performance.
It envisages closer working between the assembly government, education authorities and schools.
Clusters of schools will be identified to concentrate on improvements and specially trained head teachers will be drafted into schools.
A pilot scheme will be run in 48 schools across four different areas in the forthcoming academic year before being rolled out in the next three to five years to all schools.
Ms Hutt said the framework would "very substantially address" concerns raised by Estyn.