Michael Gove has warned that illiteracy and innumeracy was leading to "wasted" lives as he called for a "determined national commitment" to tackle the problems.
The Education Secretary also indicated that p arents will face "stronger sanctions" if they fail to ensure their children turn up to school and behave properly.
Mr Gove defended his reforms to the education system as he said that "rescuing the next generation" was the "driving moral purpose" of his changes.
In a keynote speech at an event organised by the Policy Exchange think tank, Mr Gove outlined his plans to combat illiteracy, warning that an inability to engage properly in lessons could put children on the path to becoming criminals.
He said all children should leave primary school fully literate and numerate, and it is understood that the Tories are considering writing a pledge to eradicate illiteracy within a generation into the party's 2015 election manifesto.
Mr Gove said: "It's those children who arrive at secondary school incapable of reading properly, who find they can't follow the curriculum, who cover up their ignorance with a mask of bravado, disrupting lessons, disobeying teachers, dropping out of school, drifting into gang culture and in the worst cases, ending up in the justice system.
"That is one critical reason why I have said we need - as a nation - to commit to eliminating illiteracy and innumeracy - to save lives which are currently wasted.
"The number of children who genuinely cannot ever read - whose learning difficulties are so severe they cannot decipher prose - is tiny. But the number of children who currently leave primary school unable to read is indefensibly high.
"We've taken action to deal with this scandal. Not least by introducing a phonics screening check at the end of Year One to make sure every child is decoding fluently and identify those children who need extra help. But we need to do more.
"A determined national commitment to ensuring children are properly literate and numerate is not in any way a narrowing of the curriculum, it is a precondition of enjoyment of a fully-rounded curriculum.
"This commitment is not one that can be delivered by schools or Government alone; it will require the backing of all those who want children in this country to reach their full potential."
He said parents had a responsibility to ensure their children do not miss out on the "transformative effect" of education as he indicated a Tory government would put tougher sanctions in place.
In 2011, Mr Gove backed proposals from behaviour tsar Charlie Taylor, who said unpaid fines by parents whose children played truant could be automatically deducted from child benefits payments, but the policy was blocked by the Liberal Democrats.
A source said the Education Secretary "is just as keen on the idea as he was then".
In his speech, Mr Gove said: " We need to ensure that those parents who don't play their part in ensuring their children attend school, ready to learn and showing respect for their teacher, face up to their responsibilities.
"We will, later this year, be outlining detailed proposals to ensure parents play their full part in guaranteeing good behaviour and we will be outlining stronger sanctions for those who don't."
Mr Gove's hardline approach to schooling has seen him clash repeatedly with teaching unions, who claim his curriculum shake-up is a "personal ideological crusade" that fails to address what is best for pupils.
But he dismissed suggestions that his changes are too demanding and made clear his reforming zeal will not falter.
Mr Gove said: " I want every child to be able to go to a state a school which excels, which nurtures their talents, which introduces them to the best that has been thought and written, which prepares them for the world of work and adult responsibility, which imbues them with the strength of character to withstand life's adversities and treat other humans with courtesy and dignity, which gives them the chance to appreciate art and culture, to enjoy music and drama, to participate in sport and games, which nurtures intellectual curiosity and which provides a secure grounding in the practical skills the modern world requires."
He added: "Believe me, I know what real barriers to success look like. I spent the first four months of my life in care. Both my parents had to leave school at 15. My sister spent all her school career set apart from other children who were just as bright as her in a school for children with special needs. And I know what setting up children to fail looks like.
"It's sending working-class children to school without daring to think they might be intellectually curious and capable of greatness, denying them access to anything stretching or ambitious, setting expectations so low you can never be surprised by someone's potential, giving children flimsy photocopied worksheets instead of proper rigorous textbooks, feeding them a diet of dumbed-down courses and easy-to-acquire qualifications, lowering pass marks and inflating grades to give the illusion of progress, shying away from anything which might require grit, application, hard work and perseverance, and then sending these poor children into the adult world without the knowledge, skills, character and accomplishments they need, and deserve, to flourish.
"That is setting children up to fail. And that is what I will not tolerate."