English students have been beaten by their Asian counterparts in a key international test to measure skills vital to the job market.
England came 11th overall, edged out of the top ten by Singapore, Korea, Japan, Hong Kong and Shanghai.
But domestic schools did better than expected and have outperformed a number of western rivals.
The average score across 44 industrialised economies was 500 with the 137 English schools tested scoring an average of 517 in an online exam to measure practical problem-solving ability. It is the first time that the test has been used.
English students outshone their counterparts in France, Germany and the USA in the tests, a new component of the Programme for International Student Assessment (Pisa).
The Organisation for Economic Co-operation and Development (OECD) said that English students did 'significantly better' in problem solving compared to pupils in other countries with similar maths, reading and science scores.
But despite English students' relatively impressive headline performance, the test revealed that almost one in six of the English 15-year-olds tested failed to reach a minimum standard of problem solving ability.
A spokesman for the OECD said: "These students are, at best, only able to solve very simple problems that do not require thinking ahead and that are cast in familiar settings, such as choosing the cheapest models of furniture from a catalogue."
In Japan and South Korea, just 7% of pupils were found to be at such a low level.
The organisation warned that students with weak problem solving skills would struggle to find work as jobs become increasingly demanding.
The OECD's director of education and skills, Andreas Schleicher, said: "Today's 15-year-olds with poor problem solving skills will become tomorrow's adults struggling to find or keep a good job."
Another cause for concern was the dismal performance of immigrant students in English schools.
On average, immigrant pupils scored 17 points less than their British-born classmates - the largest gap of all of the countries tested.
Explaining the gulf, Pisa analyst Francesco Avvisati, said: "Immigrant students in England do worse than non-immigrant students in problem solving and in science as well, but not in reading and mathematics.
"Immigrant students focus so much on reading and mathematics that they actually succeed in closing the gaps in those subjects but sometimes they don't benefit from all those opportunities given to non-immigrant students to develop their problem solving."
Despite areas of weakness, today's results are in stark contrast to England's poor showing in the OECD's global rankings for maths and reading announced in December 2013.
The UK was ranked 16th for reading and 19th for maths, sparking calls for a radical overhaul of the school system.
The OECD's head of early childhood and schools division, Michael Davidson, said: "Problem solving is where England comes out relatively strong.
"If you value those skills, and they are obviously valued by employers, the demand for those problem solving skills is strong and growing, then clearly England is producing skills for students that match what the growing demand of the labour market is."
Wales, Scotland and Northern Ireland did not participate in the optional new test.