Qualifications and Curriculum Authority head Ken Boston told MPs on Monday that the private contractor ETS Europe faces fines potentially running into tens of millions of pounds for failing to deliver the national curriculum test results on time on July 8.

The QCA has now announced that it was considering "all available options" to ensure that outstanding results for Key Stage 2 and 3 tests in English, maths and science are delivered quickly and to make sure that next year's marking goes smoothly.

The announcement was welcomed by Schools Secretary Ed Balls, who branded the delays in getting results to 11 and 14-year-old pupils "unacceptable". The majority of papers have now been returned to schools, and Mr Balls said he was concerned that remaining results should be delivered "as soon as possible".

Question marks have also been raised over the quality of marking, with some teachers claiming that bright students received marks below those of classmates with less ability in the subject. Mr Balls said that watchdog Ofqual continued to monitor the issue.

In a statement, the QCA said: "QCA is currently in discussions with ETS Europe following the problems in delivering this year's National Curriculum test results. QCA is considering all available options to allow the timely conclusion of the work for the 2008 test series, and to secure a successful 2009 programme. QCA is determined to ensure that confidence is regained in the process, and that decisions are made to safeguard the interests of the pupils, schools and taxpayers. No further comment can be made while these discussions are taking place."

In an appearance before the House of Commons Schools Committee on Monday, Dr Boston admitted that "the clock is ticking" on next year's tests, as successful marking depends on a lengthy period of preparation in advance.

There are fears that by the time this year's confusion is sorted out, ETS will already be behind schedule on preparations for 2009.

Questions have also been asked about whether they will be able to recruit enough markers, after many complained of poor experiences during this year's marking period.

An independent inquiry has been commissioned by Mr Balls, and when it reports there are certain to be calls for ETS to be stripped of its five-year contract or for the national Sats exams to be dumped in favour of internal school tests.