I'd prefer to keep the whole separation thing. Maybe not just factor in ability, but also attitude and behaviour. Being in a Set 1 maths class we still had a group of 4 or 5 idiots who had decent maths skill but who just pissed about constantly so we barely made any progress each lesson. It was even more frustrating than having lower ability students slowing the lesson down. At least the lower ability students actually wanted to continue with the lesson.