The Australian Education Union has lifted its planned boycott of next week's national literacy and numeracy tests after a last minute peace offer from Federal Education Minister Julia Gillard.

Ms Gillard announced this morning that a working party of independent experts would be established to investigate the union's concerns about the alleged misuse of data from the tests which can be used to form league tables ranking schools against each other.

As the union bans only applied to government schools, the move should see the tests conducted uninterrupted and without the need for strike breakers when held from next Tuesday to Thursday.

Ms Gillard said the working party, to be formed by the Australian Curriculum Assessment and Reporting Authority, would include education experts, union representatives and principals' organisations and would look at the use of student performance data that would lead to further improvements to the controversial My School website.

AEU federal president Angelo Gavrielatos said the working party would provide an opportunity to address teachers' concerns about the use of testing data in league tables.

“It will also provide an opportunity for teachers and principals to engage in a genuine dialogue with the government on a sound approach to school accountability and improving results,” Mr Gavrielatos said.

For more details on how the decision will affect NAPLAN tests in the ACT, see tomorrow's Canberra Times.