The decision to force teenagers who fail to achieve at least a C grade in GCSE English and maths to retake the exams has been criticised by Ofsted's new chief inspector.
Amanda Spielman said the policy is "well-intentioned" but is causing "significant problems".
In a speech, she argued that while literacy and maths are important, making youngsters redo exams may not be the "right way forward".
"One area of the curriculum has dominated almost all discussion in recent months, and that is English and maths GCSE retakes," Ms Spielman said.
"This is a well-intentioned policy, but in its current form we can see that it is causing significant problems."
She added: "Let me be clear, when it comes to success in the labour market, nothing is more important than literacy and maths. We know that they are highly valued, with employer surveys and wage premiums showing that employers will pay more for people who are literate and numerate."
The subjects are also important to many other areas, including engineering, business, IT, physics and philosophy, Ms Spielman said.
"And we still have a long way to go to make sure all our students leave education with the knowledge and skills they need.
"According to the OECD's (Organisation for Economic Co-operation and Development) survey of adult skills, England is unique in that our young people have literacy and numeracy skills no better than their grandparents' generation.
"So a focus on English and maths is an indisputable priority. But we must ask ourselves whether expecting all students without a C grade to retake English and maths is the right way forward.
"We all saw the, quite frankly miserable, statistics last year, when less than a fifth of students managed to get a C or higher when they retook their GCSEs last year, and around two-thirds of students overall did not manage to improve their grade. That is such a waste."
Ms Spielman, who took up her post in January, said she hoped that the Government, while maintaining the policy objective, would reflect on feedback from Ofsted and others to "refine its approach to promoting these vital maths and English skills".
Ms Spielman was speaking at an Association of Colleges (AoC) conference.
AoC chief executive David Hughes said: "We have been working hard to highlight the difficulties in making the current English and maths GCSE resits policy work effectively.
"It is a challenge for every college and we believe has enormous consequences for college inspection outcomes.
"It is therefore very welcome news to hear Amanda supporting the call for the Government to reconsider its approach to this policy as well as acknowledging the need for inspectors to recognise the scale of the English and maths challenge which colleges face."