Children as young as five could face formal classroom tests under proposals unveiled on Wednesday by Nick Clegg.

In what would be seen as a significant extension of testing, the deputy prime minister will announce a consultation on whether to introduce a "baseline" test at the start of reception for five-year-olds as part of a new drive to support pupils.

The Liberal Democrat leader will unveil the proposals as he announces a big increase in the pupil premium for disadvantaged primary school children, given to those on free school meals. It will lift from £900 in 2013-14 to £1,300 in the year following.

The per-head premium will also rise for secondary school pupils but, for the first time, primary school pupils will see a greater rate of increase. The overall cost of the pupil premium will rise from below £1.9bn this year to £2.5bn next year.

The proposed tests for five-year-olds in England would be a more formal version of tests already set informally by some teachers. These include sitting a child next to a computer for 15 minutes and asking them, for example, to point to a carrot that would be displayed on the screen. As another example they could also be shown a picture of four cats. The pupils would then be asked how many cats are displayed on the screen.

The new tests would be subject to external supervision: outside examiners would assess papers but would not sit in on the tests.

Clegg will announce that to ensure the new standards are fair it will be necessary to establish a new benchmark, possibly assessed from pupils' earliest days at school, to assess whether primary schools have made progress.

An early draft of the consultation, to be published on Wednesday, says: "We would welcome views on the most appropriate point for a baseline to measure progress. We propose either retaining a baseline at the end of key stage 1 using end of key stage 1 tests or introducing a simple baseline check at the start of reception (making the early years foundation stage profile non-statutory)."

The pupil premium is one of the Lib Dems' signature policies which featured prominently in its general election manifesto in 2010. The party said on the first page of its manifesto that it would invest £2.5bn "in schools targeted to help struggling pupils" – a target that will be met with the announcement.

George Osborne announced in his spending review that the pupil premium would simply rise in line with inflation from 2015-16. This means it will rise more slowly than it has in this parliament. It was first set at £625 per pupil in 2011-12.

Clegg will use the announcement to set primary schools a new target for the key stage 2 tests pupils take at the age of 11 as they prepare for secondary school. From next year a school will fall below the "floor target" – triggering an Ofsted inspection – if fewer than 65% of its pupils achieve level 4 or above in reading, writing and maths.

Under the changes, 85% of pupils will have to reach a "good level of attainment" by 2016 in updated tests for 11-year-olds. The old level 4 will be replaced by a new "scaled score" in line with the new national curriculum covering maths, reading, spelling, punctuation and grammar.

This would be set at a level that would show pupils are "secondary ready". Failure to meet the targets would also trigger an Ofsted inspection.

Ministers argue that the increased resources and the renewed focus on primary school pupils will help with education thereafter. Clegg will say: "Every primary school should strive to make its pupils ready for secondary school by the time they leave. All the evidence shows that if you start behind, you stay behind. A better start at secondary school is a better start in life.

"I make no apology for having high ambitions for our pupils. But for children to achieve their potential we need to raise the bar – in terms of tests, pass marks and minimum standards. I am confident that primary schools and their pupils will meet that challenge."

This prompted a warning from the leader of the largest teacher union of a return to the 11-plus. Chris Keates, general secretary of the NASUWT, said: "The tests at 11, which will determine if pupils are 'secondary school ready', could risk establishing a modern-day version of the discredited and deeply damaging 11-plus system.

"Producing performance tables which rank individual pupils against their peers nationally could also result in children being labelled as failures at an early age. The government should consider carefully whether this sensitive information should be made available to other schools given the risk of a return to an 11-plus system of selection. The deputy prime minister may inadvertently be heralding the expansion of selective education so favoured by the Conservative party."

David Laws, the Lib Dem schools minister, said: "It is vital that we set high aspirations for all schools and pupils. Our new targets will prepare children for success. At the moment, pupils are being asked to reach a bar that too often sets them up for failure not success.

"So that all children – whatever their circumstances – can arrive in secondary school ready to succeed, we are giving significantly more money to primary school pupils eligible for the pupil premium. This will support this step-change in ambition."