Ed Balls today indicated Standard Assessment Tests (Sats) for 11-year-olds could be scrapped in the future as he faced the looming threat of a union boycott of next year's tests.
In what will be seen as a bid to appease the two teaching unions threatening the boycott, the schools secretary said that in future, teacher assessment of pupils' achievement will be published alongside Sats data in achievement and attainment tables.
In May, the Government's expert group on testing recommended ministers look at investing and improving teacher assessment in order to judge whether it would be possible to "move away" from externally marked tests, such as Sats, in the future.
Speaking today, Mr Balls said: "I'm absolutely not closing the door on long term reform, but we would only move away from externally marked tests if we were 100% confident we could provide for parents that objective assessment and validation."
Mr Balls claimed plans to publish teacher assessment data alongside Sats data had come from Mick Brookes, the general secretary of the National Association of Head Teachers (NAHT), one of the two unions proposing a boycott.
He said: "Mick Brookes has said to us that he believes, and his key members believe that publishing teacher assessment alongside externally validated tests is a real step forward.
"It is a proposal he put forward to us."
He added: "I think Mick is making good suggestions and we want to work together in partnership on this."
Pupils take Sats in English and maths in the final year of primary school.
Last October, Mr Balls scrapped Sats for 14-year-olds, in the wake of last summer's marking fiasco, and the science test for 11-year-olds was abolished earlier this year on the advice of the expert group.
Today he highlighted these moves as he insisted the system "was not set in stone."
He added later: "We are not closing the door to teacher assessment playing a bigger role. The steps we are taking now will strengthen that role."
Mr Balls did say that ministers do not have full confidence in teacher assessment at the moment, so Sats tests will remain for now.
Under today's announcement, teacher assessment data will be published alongside Sats data from next year.
From 2011 there will be "light touch" moderation of teacher assessment.
The NAHT and the National Union of Teachers (NUT) both passed resolutions at their annual conferences this year calling for a boycott if Sats are not scrapped.
They want to see Sats replaced by teacher assessment and argue the tests are bad for children, teachers and education, and cause unnecessary stress.
The unions also want to see school league tables abolished.
Both unions, which represent a large proportion of primary school teaching staff, are surveying members to see if they would be willing to support the action.
If this shows widespread support, formal ballots will be taken at a later stage.
Mr Brookes said: "This is a step in the right direction. It is good to have teacher assessment acknowledged as being important as part of the way in which children's work is assessed.
"Although it is a step in the right direction, it is not a step far enough yet. There are other things we need to secure our aims."
He said the union wants Year 6 pupils to have "the best year possible", and this does not mean rehearsing for Sats tests for up to 10 hours a week in the Spring term.
"NAHT will not rest until every child leaves their primary school with information about their academic progress that is 100% accurate," Mr Brookes said.
"Parents and teachers in the secondary sector must receive precise information about the progress of individual children in order to properly engage in planning the next stages of their learning journey."
Mr Brookes added that the boycott was not being called off at this stage.
Mr Balls said today it would be "very disruptive" for anyone to not cooperate with the tests, adding that he didn't believe heads and teachers would think that was the right thing to do.
He added: "We are clearly saying we want to work with you, we want a form of accountability, we want a form of teacher assessment, but we also want to make sure every parent knows, in an externally validated way, how their child is doing and how the school is doing."
NUT general secretary Christine Blower said: "The fact that Ed Balls has repeated that testing and assessment are 'not set in stone' is welcome. The fact that he speaks warmly of teacher assessment is also welcome.
"However, his enthusiasm to tell us that he wants what 'works best for pupils and schools' is not borne out by his decision to both maintain the Sats next year and publish the results. However, his proposals may show a welcome shift in position. We would want to see the detail of his proposals and be fully involved in the discussion on their implications.
"We believe we have won the case on tests and teacher assessment. Our petition and work with parents and the wider community shows that there is precious little support for the tests in their present form.
"The NUT has always supported teacher assessment as the best indicator, both of what children and young people can do, and the best way to support their learning.
"Both the NUT and NAHT know that league tables based on test results do a disservice to many of our schools. The NUT is enthusiastic to engage with the Secretary of State on the School Report Card as a way forward. We have many positive suggestions to make which will give parents and the wider community the real picture of the good work schools are doing.
"We look forward to working closely with the Secretary of State and our colleagues in the NAHT on these important professional matters."
Chris Keates, general secretary of the NASUWT teaching union, said: "This announcement represents the worst of all worlds for the classroom teacher and will create confusion for parents.
"This is a shift from the school being held accountable to individual classroom teachers shouldering this burden.
"It is, therefore, not surprising that this suggestion has come from a former headteacher. What is surprising is that the Secretary of State has accepted it.
"Individual teachers will be left exposed to criticism of their professional judgment and the potential for their professional reputation to be impugned."