A school watchdog's view that Bradford's stiff education targets are unrealistic means they could now be toned down by Council chiefs.

Ofsted says targets set for the numbers of pupils reaching agreed levels in national tests and GCSEs are too ambitious.

And that has strengthened the case of Education Bradford, the private company now running the LEA under a ten-year contract.

It wants to renegotiate its £360 million deal with the Council and lower the targets enshrined in the contract.

Its appeal follows its first year in business, when it attained 47 out of 52 targets, earning £8,450 instead of a projected £870,000 in incentive bonus payments.

Initially, local politicians rejected any suggestion that a fresh deal could be struck, but now appear to have backed down.

The Ofsted report states: "The targets are extremely challenging and will require a significant step change in the rate of improvement.

In some areas, such as Key Stage 2 English and at five A*-C grades at GCSE, the targets for 2003 are unrealistic."

Ian Stewart, Chief Executive of Bradford Council, said the situation had arisen because the two sides negotiated the contract before the 2001 exam results became available. They were lower than predicted.

"There's a requirement on us to look very carefully at what Ofsted have said," he said.

"If the targets are impossible, then I'd suggest we got it wrong because of the information we had got, although we took a great deal of care and used the DfES forecasts available to us at that time."

He added there would be no movement on the requirement of Education Bradford to ensure the district's results reached national averages by 2005-6.

Councillor David Ward, executive member for education, said: "We have been approached by the contractor and we are looking at the legal position.

"If incentivised payments are part of helping us to raise educational achievement in Bradford, we need to look at it."

Teaching unions, which have always opposed the privatisation of the LEA, are opposed to the targets being altered.