When Yuliana was born four years ago, the hospital doctors kept her mother and father in separate rooms, isolated from one another in the minutes that should have been among the happiest of their lives. Their agenda was clear. ''You must give your baby up - once most fathers know that their child has Down's syndrome, they leave the family,'' they urged the mother. To the father they said: ''Your child has Down's syndrome. She has no future, you must put her in an institution. She will be better off there. Down's syndrome can't be cured.''

In the days that followed, Oksana and Andrei Kuznetsozov refused to bow to pressure and relinquish their child to the authorities. They are unusual: most Russian parents of Down's syndrome babies follow the advice of the doctors and give up their children to a state institution where, with no loving family around them and no proper educational or physical stimulus, their future is bleak.

Families like Yuliana's face a difficult choice. The state offers little support, and many parents who keep their Down's syndrome babies raise them in a vacuum. In Moscow, 75 per cent of these children are brought up in state orphanages; in the regions, the figure is 85 per cent. Yuliana is one of the lucky 25 per cent in Moscow. She is happy and loving, and enjoys drawing and playing with other children. She can recognise different animals, can do some puzzles, knows how to feed her dog and loves to put her dolls to bed. She has started to recognise colours.

Loading article content

The Kuznetsozovs used to live in Tuvasia, 750km from Moscow. They moved to the capital in the hope that there might be help available for Yuliana. For the first few months they found nothing; then, one day, Oksana saw another woman getting off the metro with a Down's syndrome child. A few days later, seeing her at the same station at the same time, she plucked up the courage to go over and talk to her. That meeting led her to Downside Up, a unique independent charity offering the families of Down's syndrome children - from newborns to eight-year-olds - a range of support services. Its patrons include Cherie Blair and Lyudmila Putin, the wife of the Russian president. Moscow families can attend daily for group sessions, speech therapy, early-intervention programmes, physiotherapy and other help. Seven years ago, when the charity was founded, no Down's syndrome children were allowed into kindergartens;

now, 50 per cent of Down's children who are kept within their families are accepted into integrated kindergarten groups.

This change is indicative of a slow, quiet revolution in the Russian education system. It has a long way to go - but gradually market forces are beginning to take effect. While the rigid school structures of the Soviet era remain in place for now, slowly educational thinking is loosening up.

The support for Yuliana is limited. She may receive a place in state kindergarten, but she has little chance of being educated in what we, in Britain, would call mainstream schools. The notion of social inclusion is still something of a will-o'-the-wisp in Russia. Schools are strictly categorised, with some set aside for children with ''intellectual disabilities'', such as Yuliana; others for autistic children; some for those with physical disabilities; some for ''difficult families''; some for single-parent families and others still for children whose fathers have been killed in the conflict in Chechnya.

Little Yuliana's future is certainly brighter today than if she had been born 20 years ago - but what kind of future awaits the rest of a new generation of Russians? With market forces chipping away at the education system, teachers are being told to introduce new methods, a process which for some is unwelcome and painful but for others is an opportunity to blossom. With a literacy level of around 95 per cent (in Soviet times it was an astonishing 98 per cent), Russia has long been proud of its educational standards. But today its education system is at a crossroads. It is embracing market economics with such a voracious appetite that it must surely soon suffer indigestion.

The education ministry wants local businesses to help run school boards, and the Moscow education department is courting Coca-Cola to sponsor its schools; and yet teachers are going out on strike, not because they want more money but because they have not been paid for months at a time. Some teachers, particularly those nearing retirement, are struggling to grapple with new textbooks in which Russian history has been rewritten and economics is a new subject, quite different from the political doctrine taught just over a decade ago. Rote-learning of facts and figures is out; creativity and questioning is in. Churches are even now free to operate Sunday schools. Those running Russian education have realised that while the Soviet system produced a highly literate population, the vast majority were institutionalised in their learning. Students were notorious for their lack of interest in how

to solve intellectual problems - they only cared what the answer was. They had no spirit of inquiry - and the new Russia, struggling for its place in the global marketplace, needs people who can think outside the box.

''Ten years ago students did not want to study because they felt they could get ahead without studying,'' says Natalia Buchstaber, an international MBA prizewinner who now works in banking in Moscow (she perfected her English at Stevenson College, Edinburgh). ''But education has become more important again - now people believe that if you don't have an education, you will have to do what you are told; if you don't have a good education, you don't have choices.''

On the face of it, parents have almost total choice in the education of their children - unless, of course, their offspring are unfortunate enough to fall into categories such as ''intellectually disabled''. They have only to turn up on the first day of school and their child will be accepted. Take, for example, school number one in Moscow - a school for ''gifted'' children. Unlike most Russian schools, which have only a number, it also has a name: ''Fairy-tale''. Lyubova Sklyarova, its headteacher, explains its bizarre selection process: ''There is a waiting list, but it is first come, first served.'' Children are not tested prior to entry but chosen because they want to go to that particular school.

Nearby, school number 1,674 has its own ideas. Traditionally, children go to kindergarten from three to six and formal school from six until 15 at the earliest, but 1,674 takes children from the age of three to ten. It was the dream of its headteacher, Lyudmila Supranova, who says she loved her kindergarten children so much that she could not bear to let them go. So she devised a new model of school and asked the education authorities to resource it - and resource it they have. It has 75 pre-school children, 105 at junior school, and a staff of 72, including administrators, a nurse, tutors, nursery nurses and 37 teachers. The corridors are carpeted, the walls are timber-panelled and the assembly hall has a grand piano; indeed, most classrooms have their own upright piano.

Each age grouping has a complex of rooms, one for lessons, another with dinner tables, and off that a little kitchen where a cook prepares fresh meals. School 1,674 prides itself on promoting health: it offers a breakfast of porridge, a fruit-and-veg-filled lunch, and pies baked on the premises. Kindergarten children go for a walk three times a day, whatever the weather; if there is enough snow, their parents can join them at lunchtime for skiing.

Beside the dining area are the class toilets with handbasins and matching pink towels. The walls are nearly all bare, though, and pristine toys, which look as if they've never been played with, are kept inside glass cases. Some of the strict old Soviet habits die hard, it seems.

The children are taught a variety of disciplines - art, craft, music, rhetorics, dance, drama, sometimes even the playing of computer games. An English lesson for a class of nine-year-olds reveals astonishing levels of mastery of a foreign language. ''Let's practise the future simple tense,'' says the teacher. And so the class of 11 (all classes are split in two for modern languages) talk about what they shall buy when they visit the shops tomorrow. Their grasp of English grammar is so good that not only can they use different tenses and moods, they can actually explain the differences.

Sitting in on their lesson is like going back in time to the immediate post-war era in Britain. Educationalists who bemoan the loss of grammar in our system could only look on and weep. Most British teachers, meanwhile, would also cry in envy at the lack of disruption. ''What do you do as a punishment when a child misbehaves?'' I ask the teacher. She looks almost bewildered by the question. Eventually she shrugs her shoulders and answers: ''I would look offended and not talk to them.''

Another question, this time for the children: what do they want to be when they grow up? The replies come thick and fast: singer, journalist, doctor, ecologist, designer, hairdresser, businessman. For this is the new Russia, where the social order has been turned on its head; where an affluent middle class is surging forwards, its spending power obvious in the growth not only of designer-label shops but the emergence of Early Learning Centre-type stores. The fastest growing chain in Russia calls itself Little Genius, and sells expensive toys and games (including the latest ''pocket spy-kit'') to stimulate nascent creativity.

When you are used to the British comprehensive system, where some schools are magnets and others sinks, and middle-class parents will move heaven and earth to avoid the latter, it is automatic to assume that 1,674 is some kind of model or show-school. Yet when I ask Lyudmila Supranova how she selects her pupils, she seems not to understand why I would ask such a question and insists: ''We just take the first 40 who turn up. Some years there are more children than we have places, sometimes not. There are many other schools that children can attend.''

Using the British education system as a frame of reference, a system with no discipline problems and eager, willing pupils seems almost too good to be true. Yet that is what the Russian authorities would have us believe: that all their schools are good, just different in certain elements.

School 1,253, in the shadow of Moscow's financial centre, has a twinning arrangement with King's College School in Wimbledon, London - one of England's top-performing independent schools and one which, like 1,253, puts special emphasis on modern languages. So how does this Russian school select its pupils? ''Mainly the places are for the children who live in the local area, but when there are more applications than places, all the children gather in a hall and the teachers go round each one and ask them questions that test their memory and understanding,'' says its director. What? No pre-entry testing? No competition to buy houses in the catchment area? It would appear not. Once again it is patiently explained that while yes, this is a very good school, there are many other good schools too.

Yet a school is only as good as its teachers, and times are hard for teachers in Russia. One of the history teachers at school 1,253, Alexey Kuznetsov, is also a former pupil. He is one of a tiny minority of male teachers, and says he can only afford to remain a teacher because he is also trained to teach English and can therefore supplement his salary of (pounds) 100 a month by offering private tuition in English. A former colleague, a male history teacher without that essential second string to his bow, left teaching last year because he couldn't afford to feed his family on a teacher's salary. Now he is working as a sales manager with an advertising company.

The same thing is happening in other professions. Andrey Zauter qualified six years ago as a specialist in bone-marrow cancer - but, with a doctor's salary of (pounds) 4 a month in 1998, he saw little future for himself. So he applied for a British Council scholarship which gave him a year's MBA studies at Leeds University. Now he will never return to medicine. Instead he earns (pounds) 1,500 a month - ten times what he would have made as a doctor - as an acquisitions specialist within Russia's privatised gas industry. Of the 500 medical students who qualified with him, 300 have left the profession. While the free market is increasing choice, that freedom to choose is also threatening the very fabric of Russia's public services.

Education minister Vladimir Filippov wants to introduce a 36-hour maximum working week for teachers, with a set number of hours of classes and the rest of the time to be spent helping pupils after class, liaising with parents and preparing lessons. In return, he says, he will give them a salary increase of 50 per cent next January. It is, to all intents and purposes, a Russian version of the Scottish teachers' McCrone deal. Will they accept it? It seems unlikely, for teachers earn around a third of a shop-assistant's salary, and 50 per cent added to very little is still not much at all. A fixed-hours contract would also leave them unable to supplement their incomes through private ventures, which certainly pay more than the (pounds) 50 per month the new contract would offer an unpromoted teacher.

Filippov also wants to reduce the current rate of 17-year-olds leaving school and going to university from a massive 80 per cent to 50 per cent, and divide the remaining 50 per cent equally between technician-level work and unskilled labour. More radically, he wants to create a common school-leaving exam for university entrants, sweeping away the old system that allowed individual universities to set their own exams. Naturally, the old way was rife with corruption - but it also allowed university lecturers, who are about as poorly paid as teachers, to supplement their income with private tuition. Again, Filippov's reformist plans might yet backfire - if the system is to improve, the tutors must suffer.

The real challenge facing Russia is how to retain its traditional high standards while relaxing the iron grip that has held its people in thrall for so many years - and to perform this delicate balancing act while the gap between rich and poor grows inexorably bigger. With a widening poverty gap will come gaps in social expectations and behaviour: can it really be long before the disciplinary problems that infest schools from Los Angeles to London will manifest themselves in modern Russia?

The next decade will see schools grappling with fresh conundrums: how to maintain health-promoting schools while expecting Coca-Cola to sponsor the education system; how to resist pressure from a growing middle class to have access to the best-performing schools; how to ensure access to fewer university places to students from the poorest families. There are many positive signs - little Yuliana, for instance, has escaped institutionalisation. But the road from an educational system that was to all intents and purposes institutionalised itself will be a difficult one, and there will be losers as well as winners along the way. n