The Certificate of Extended Studies or E-level is designed for those students who want to continue studying after GCSE but are not ready to start A- level, and for abler pupils who want broader sixth-form courses.
The exam is being developed by the Northern Examinations and Assessment Board with the help of state and independent school heads despite government resistance in the past to intermediate exams. Ministers have also opposed heads' demands for sixth-formers to study more subjects at A-level.
John Patten, the Secretary of State for Education, will have to approve the exam before it can be offered in state schools, but independent schools can decide for themselves whether to enter their pupils. Independent school heads have been pressing the case for an intermediate exam for years.
Eric Anderson, head of Eton school, Berkshire, said: 'Too many young people in England leave school at 16 because they find the prospect of a two- year A-level course too daunting. Secondly, even strong supporters of A- level agree that a three-subject course is a narrow education.' The exam has the backing of the Headmasters' Conference which represents the top public schools, the Girls' Schools Association of independent girls' schools, the Association of Principals of Sixthform Colleges, the Secondary Heads' Association and the National Association of Head Teachers.
Candidates for the new E-level will be able to take it alongside A-level or vocational courses or on its own. They will be able to transfer to A-level at the end of the course, which may be taken over one or two years.
Five subjects, English, History, French, Maths and Physics, will be offered in the pilot, but other subjects will be added later. Syllabuses will be designed for pupils who achieve GCSE grade C, the rough equivalent of the old O-level pass, in several subjects.
The Department for Education said ministers were open-minded about new exams, but their main priority was to encourage more vocational courses. Kathleen Tattersall, the exam board's chief executive, said a vocational course would not necessarily serve the interests of those who were not ready for the challenges of A-level.
'They want to study several subjects and not spend all their time in one vocational area such as business studies or leisure and tourism,' she said.
Intermediate courses are increasingly popular. Numbers taking the Associated Examining Board's new Certificate of Further Studies, designed as an alternative to GCSE re-sits, have trebled this year.
The Royal Society has written to Mr Patten urging him to raise the limit on GCSE maths coursework from 20 to 30 per cent. Last year, the Government reduced coursework in maths, English and science. Professor Roger Blin- Stoyle, chairman of the society's education committee, says in the letter that the national curriculum in maths cannot be properly assessed unless the exam includes more coursework.