National curriculum tests for pupils aged 7, 11 and 14 show schools in Hackney, east London, improved by up to three times the national rate.
Local government leaders insisted yesterday it would be a "disaster" if the Government drafted in contractors to take over the education authority's functions. The largest teaching union said the troubled council had "turned the corner".
The Independent revealed last week that ministers were preparing to take direct control of the education authority, which could be the first to have its functions handed to private-sector consultants.
Test results are still well below national averages, but scores for pupils aged 7 and 14 are up. The number of seven-year-olds gaining expected standards in reading is up from 64 per cent to 70.
In maths, the score rose from 69 per cent to 76 and the science score increased from 70 per cent to 76.
In English for 14-year-olds, the proportion gaining expected standards rose from just 36 per cent in 1996 to 45 per cent last year. Maths and science pass rates were also up.
The borough has halved its number of failing schools, bringing four primaries - St Monica's, St Paul's and St Michael's, Morningside and St Matthias - out of "special measures".
The Local Government Association has demanded to meet David Blunkett, the Secretary of State for Education and Employment, to prevent a takeover of Hackney council's education department.
Graham Lane, Labour education chairman of the LGA, said he wanted to persuade ministers to allow local government experts to support Hackney as a way of avoiding an outright takeover.
He said: "If they send in a private company all they will have is civil war with the Government. To hand Hackney to the private sector is totally unacceptable and if they do it they will have serious problems with local government. Privatisation is not the way forward."
Earlier this year, Mr Blunkett invited expressions of interest from firms and local authority departments prepared to take over failing local authorities in whole or part.
Officials have already been contacted by 98 groups and companies interested in consultancy work and 107 organisations interested in taking over council functions.
Potential private sector bidders could include Nord Anglia, a multi-million pound company that runs several independent schools, as well as being a major provider of privatised careers services. CFBT, a not-for-profit consultancy that is a main supplier of Ofsted inspectors, would also be a possible contender.
Hackney brought in CFBT last year as consultants to turn round Rams Episcopal Primary, a failing school. The firm is also heavily involved in the Lambeth education action zone in south London.
Doug McAvoy, general secretary of the biggest classroom union, the National Union of Teachers, said the east London borough had started to "turn the corner". He said: "Our members feel the authority, whilst not having done everything to turn things round, has made tremendous strides."Reuse content