John Swinney has announced the cancellation of all pupil grades that were lowered during the school results fiasco.
The Education Secretary, who issued an apology, said the downgrades would be reversed and the initial teacher-based estimates would be used instead.
He made the dramatic U-turn after Labour tabled a motion of no confidence in him, a vote that will take place on Thursday.
After the cancellation of exams, final marks were based on teacher judgement followed by a national “moderation” system devised by the Scottish Qualifications Authority (SQA).
However, the moderation process for individual pupils was based on how schools did in the past, rather than reflecting their own efforts.
Nearly 120,000 grades were lowered and the reductions disproportionately hit young people from poorer backgrounds.
The Higher pass rate for pupils from the most deprived areas dropped by 15.2%, but only by 6.9% for pupils in the most affluent areas.
The system infuriated parents and pupils and the SNP Government faced one of its biggest crises since winning power in 2007.
Swinney said: “In speaking directly to the young people affected by the downgrading of awards – the seventy-five thousand pupils whose teacher estimates were higher than their final award - I want to say this: I am sorry.
“I have listened and the message is clear. They don’t just want an apology, they want to see this fixed and that is exactly what I will now do. To resolve this issue all downgraded awards will be withdrawn. I am directing the SQA to re-issue those awards based solely on teacher or lecturer judgement.”
He continued: “We now accept that the risk of undermining the value of qualifications is outweighed by a concern that young people, particularly from working class backgrounds, may lose faith in education and form the view that no matter how hard you work, the system is against you.
“Education is the route out of poverty for young people in deprived communities and we cannot risk allowing that view to take hold.
He also said that the SQA will provide new grades to college and university admissions bodies, and ensure there are enough places in further and higher education.
Green MSP Ross Greer, a critic of the original SQA system, said:
“I warned for four months that this would happen, and that it would be unacceptable. Unfortunately, the Education Secretary and SQA refused to listen then, but I am glad that they are listening now.
“The Scottish Government has agreed to implement the solutions demanded by the Greens, starting with the restoration of 124,565 grades which were lowered by the SQA’s discriminatory ‘moderation’ system. In this extraordinary year pupils’ grades should always have been based on the professional judgement of those who know them best, their teachers."
Barry Black, an education researcher who helped highlight the orginal system's effect on pupils from deprived communities, said: "This whole process has been one of great uncertainty and could have been avoided from the start had the SQA and Scottish Government listened to the warnings from early as April.
"The changes announced today would not make for an ideal alternative assessment model if they were planned from the start, but are fairer than the methodology that was used and will be of huge relief to the impacted young people. It is a welcome change."
Swinney’s statement followed an apology by Sturgeon.
She said: “We’re saying we didn’t get this right and I want to say again to young people that I’m sorry for that.”
Sturgeon added: "This situation is not the fault of students and so it should not be on students to fix it, that’s on us."
