Many 5-year-olds are starting school unable to count or complete the alphabet, despite years of pre-school education.
Many do not know the difference between a letter and a number and some do not know how to hold a pencil, principals say.
They worry that the problem is getting worse, just as the Government prepares to introduce national standards in reading, writing and maths, starting in the first year of school.
The Early Childhood Council has acknowledged young children may need to be taught more specific skills and content before they start school.
Principals have raised the alarm because they fear their schools may be held accountable for 5-year-olds failing to meet the national standards at the end of their first year.
Rosemary Vivien, head of Edendale School in Sandringham, Auckland, said the Ministry of Education had outlined general expectations of what children should know when they started school.
These included being able to count to 20, knowing the alphabet, recognising colours and being able to write their own name.
More than half the children who started at Edendale, a decile 5 school, could not do that.
"The majority can't count to 20," said associate principal Jackie Procter. "A considerable number can count to five or 10 but some can't count at all."
About a quarter could not tell the difference between a number and a letter.
Ms Vivien and Ms Procter both said the problem was not the result of poverty or families who spoke English only as a second language.
"It's across the board," said Ms Procter. She noticed the same trend at her previous high-decile state school, where over eight years fewer and fewer new entrants were ready to start learning to read. An increasing number did not know their letters or numbers.
Auckland Primary Principals Association president Marilyn Gwilliam said she saw the same trend at Papatoetoe Central School in South Auckland. "We've noticed increasingly over the last few years fewer of them coming in with really good alphabet knowledge and number knowledge to start their learning."
Early Childhood Council chief executive officer Dr Sarah Farquhar said she was not aware of any complaints from schools about the issue. But it probably highlighted a need to rethink the early childhood curriculum, which was based on child development through play and social interaction.
"We should be thinking, 'Do we need to be teaching more content, do we need to be teaching some specific skills?' The curriculum doesn't list specific skills that need to be taught and this is something that is definitely worth thinking about."
Dr Farquhar said the sector also faced a serious teacher shortage, partly because of a Government requirement that all teachers must hold a diploma or a bachelor of teaching degree in early childhood education by 2011.
She said children could often pick up literacy and numeracy skills quickly once they started school.
"If you find the majority of new entrants can't count to 20, it might not be that they can't do it - it's just that they haven't been taught."
However, principals said there was no way they could get children who started so far behind up to the national standard in one year.
Ms Vivien said she wondered whether the policy meant schools would have to start talking to parents and pre-school centres when children were aged 4 to make sure they had the right skills to start school.
Education Minister Anne Tolley said schools should not worry about making sure all children reached the required standards in their first year.
The Government was more interested in how much progress pupils made in that year and the rest of their years at school.