Children in Wales are falling behind their English counterparts in terms of literacy – but they report being happier at school.

The literacy figures come as a further blow to Gwent after three counties were put into special measures, indicating urgent improvement is needed to their education provision.

Blaenau Gwent, Monmouthshire and Torfaen have all been put into special measures since 2011.

Professor Chris Taylor, from the Wales Institute of Social & Economic Research, Data & Methods (WISERD), analysed data following 19,000 children born in the year 2000 – the Millennium Cohort Study. 2,000 of those children are from Wales.

He found that while children aged seven in England and Wales scored equally on their numeracy skills, the gap in literacy levels increased as the children grew up from aged three to seven.

But he said the government should be wary of introducing new tests and targets at the expense of children’s happiness, saying: “We might create a ticking bomb for when they are older.

“Happiness levels are important later, in terms of whether they stay on at school and what their aspirations are. It’s about trying to find a balance.”

Figures for individual local authorities were not available but Prof Taylor said some authorities in special measures were likely to have performed comparatively poorly compared to the national picture.

He added: “Within Wales there are some big differences between local authority levels. Whether it’s urban or rural doesn’t seem to matter.”

There was a similar gap between the richest children in England and Wales as between the poorest.

Prof Taylor suggested England’s figures were buoyed by good results in London.

More data which can be analysed in 2014 will give more information about the progression of children in the study.

Prof Taylor said: “If the trajectory continues in the same direction, we would expect the gap to be even wider when the children are 10 or 11. By the time they enter secondary school, Wales may be half a year behind.”

A Welsh Government spokesperson said: "We have been absolutely clear that standards and performance in Wales, particularly in literacy in numeracy, need to improve and we are already introducing measures to make this happen, including the National Literacy and Numeracy Framework (LNF) and national reading and numeracy tests.”

In May, pupils across Wales took new national reading and numeracy tests for the first time. Results will inform future policy.

The spokesman added the LNF will be compulsory in schools from this month and sets out what all learners aged from five to fourteen should achieve, with a particular focus on. A National Support Programme is supporting schools in implementing the new standard.

The study was presented to the British Educational Research Association’s annual conference yesterday (Weds).