Secondary schools could be forced to separate pupils by ability under plans due to be proposed by Nicky Morgan, it has been reported.
The new Education Secretary is likely to ask England's schools watchdog Ofsted to oversee compulsory setting, which could mean that secondaries have to introduce the measure in order to be rated outstanding, according to the Guardian.
It is not clear whether the move would see pupils placed into sets for all subjects, or just some, for example English and maths.
Setting has long been seen as controversial, with critics arguing that it can be detrimental to lower achievers, and supporters arguing that it helps brighter pupils.
Questions are likely to be raised about how the proposals can be legally enforced, as academies and free schools are semi-independent state schools free from government control, the newspaper said.
The Department for Education (DfE) said it was not commenting on the report.
Dr Mary Bousted, general secretary of the Association of Teachers and Lecturers (ATL) warned against the move.
"If Nicky Morgan is committed to closing the gap for disadvantaged children the last thing she should do is to divide children into ability sets and to use Ofsted to enforce this," she said.
"This is educationally unjustifiable. The evidence is overwhelming that this practice holds back poor children, denying them access to an appropriately demanding curriculum. Any claim that Ofsted is independent of government ideology will be shot to pieces if the agency is required to enforce ministerial dogma."
Prime Minister David Cameron has previously called for setting by ability within schools.
Speaking in 2006, he announced plans to introduce setting in all schools, suggesting that the method helps to stretch bright pupils and help those in danger of falling behind.
''There's a real case for more selection within schools rather than selection between schools," he said,adding that Tony Blair had promised to introduce the measure in 1997.
Ofsted chief inspector Sir Michael Wilshaw has also backed setting in the past.
Speaking last year, he advocated setting children in key subjects from the first year of secondary school.
"I want to give you my own personal view," he said. "Unless you have well-qualified experienced people who know how to deal with mixed ability then it doesn't work.
"If that's not happening it's much better to move to a setting system."
Sir Michael later added that he would "set from the word go", and that this was what he had done as head of Mossbourne Academy in east London, the position he held before becoming chief inspector.
Setting makes sure that "both ends of the ability spectrum get good teaching", he said.
Research conducted by the Education Endowment Foundation (EEF) concluded that overall, grouping appears to benefit higher attainers but can be detrimental to the learning of mid-range or lower achievers.
" On average, ability grouping does not appear to be an effective strategy for raising the attainment of disadvantaged pupils, who are more likely to be assigned to lower groups," EEF said. "Summer-born pupils and students from ethnic minority backgrounds are also likely to be adversely affected by ability grouping."
It added that on average, studies had shown that higher achievers make between one and two extra months progress when set or streamed, compared with when taught in mixed-ability groups, while l ow-attaining learners fall behind by one or two months a year, on average, compared with the progress of similar students in classes without ability grouping.
Shadow education secretary Tristram Hunt said: "We need urgent assurances that Nicky Morgan's plan will not place a cap on aspiration and confine some children to a second-rate education. All children, in all classes, do best when they are supported and challenged to reach their full potential.
"Any measures must be backed by a clear body of evidence demonstrating a positive impact on school standards for all children.
"I believe that excellent heads and great teachers know better than Westminster politicians how to deliver the best schooling for all pupils."