Secondary school league tables punish schools with a high proportion of disadvantaged students.
Researchers argue the system of ranking the institutions also results in the wrong schools being rewarded.
According to new data from the University of Bristol, league tables fail to take pupil background into account.
It reveals that once factors such as pupil ethnicity, deprivation and special educational needs are taken into account, a fifth of schools saw their national league table position change by over 500 places.
The research further indicates that 40% of schools currently judged to be underperforming would no longer fall into this category.
It comes after a detailed analysis by Dr George Leckie and Professor Harvey Goldstein, of the 2016 data from all 3,098 state-maintained secondary schools in England.
They looked at Progress 8, which looks at performance and progress across eight GCSE subjects.
Introduced in 2016, it compares GCSE results to Key Stage 2 test results, which the Government argues takes prior attainment into account when judging progress.
Concerns have previously been raised about some schools gaming the system by informally excluding low-achieving pupils ahead of the exam season in order to preserve their league table scores.
Critics have also argued that the measure is too simplistic and punishes schools with a higher proportion of disadvantaged pupils.
The researchers from the University of Bristol combined Progress 8 information with information on student background - age, gender, ethnicity, whether pupils speak English as an additional language, special educational needs, free school meal eligibility and deprivation.
Dr Leckie said: "By factoring in vital information about a pupil's background, we have seen a dramatic change in the league tables.
"This leads to very different interpretations and conclusions about education in England.
"It seems clear from our results that the higher the proportion of disadvantaged pupils in a school, the more it will effectively be punished for the national underperformance of these pupil groups.
"On the flip side, other schools are rewarded merely for teaching educationally advantaged intakes."
Under the current Progress 8 measure, researchers say there is a risk that truly effective schools in disadvantaged areas are going undetected.
Eligibility for free school meals and a pupil's ethnicity were shown to be the most important characteristics to consider.
The researchers are calling for the Government to publish and explain a pupil background-adjusted Progress 8 measure side-by-side with the current measure to present a more informative picture of schools' performances.
Dr Leckie added: "The Department for Education's decision to ignore pupil background when comparing schools is in stark contrast to both the academic literature and feedback from teachers.
"At the moment, the simplistic nature of Progress 8 as a measure places too much emphasis on schools rather than the Government or society as a whole.
"We hope our research will encourage the Government to provide users with greater insights as to why schools achieve the scores they do."
Paul Whiteman, general secretary of the National Association of Head Teachers, said: "League tables have lost their credibility.
"We've proposed comparing schools that are alike, where the size of the school and the pupil demographics are similar, for instance, rather than a league table, where schools have very little in common but are set up against each other in a list.
"Ultimately, we have to move away from data.
"Everyone understands that test and exam scores are only part of the picture when judging a pupil's performance or a school's effectiveness, so we should stop using them on their own."