David Cameron demanded the Government drop the firm at the centre of the Sats fiasco as he announced an inquiry into the future of exams.
The Tory leader also insisted ETS should forfeit any pay-off due to the marking delays, which have left hundreds of thousands of pupils across England in the dark over their results.
"We must reform the way the Qualifications and Curriculum Authority (QCA) operates and the way the Government operates to make sure that those who mess up like this do not walk away with large sums of taxpayer's money that they simply haven't earned," Mr Cameron told his regular press conference.
"We cannot let the company which has presided over this fiasco be responsible for next year's tests."
So far there have been mixed signals over whether US company ETS will be ditched, amid concern that the Government's legal position could be prejudiced by overtly confirming such a move.
However, the Conservatives insist ministers should not have agreed to any contract which means they cannot get rid of ETS quickly after serious failures.
Mr Cameron called for an early report from Lord Sutherland, who is leading an independent inquiry for the Government into the Sats debacle.
He also announced he was setting up a rival review led by Sir Richard Sykes, the former rector of Imperial College London.
The Conservative inquiry will consider how to restore confidence in the exam system so that testing in schools and exam qualifications are rigorous, robust and relevant. It will also examine how best testing can be used to assess pupils' progress, make schools accountable to parents, and measure the effectiveness of national policy.
Mr Cameron said: "We need to address the wider problems with out national testing assessment system, to which the Sats crisis has drawn attention."
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