A BAN by teachers on "A-E" reporting will be tested by the Education Department, which yesterday lodged an application in the Industrial Relations Commission to have it overturned.

South Australia Education Minister Jane Lomax-Smith said Federal Government funding of up to $250 million was jeopardised by opposition to the controversial reporting system.

"It's an unfortunate turn of events but it has to be done. The union have taken a very hard line on this," she said.

"After significant negotiations, the Federal Government compromised on several areas and we have now reached a point of no return."

Dr Lomax-Smith said the SA Government had secured "significant improvements" to the report cards, including the use of "equivalent statements" on a five-point scale for primary students, instead of grades.