One in 10 organisations which trains teachers on the job has been forced to close in the past two years after criticism from Ofsted.
Figures obtained by The TES show that 10 of the 103 bodies overseeing schools in the graduate teacher programme (GTP) have abandoned the scheme.
Others may withdraw from the programme this week when their applications are examined by the Training and Development Agency for Schools.
Up to 7,000 of the 40,000 trainee-teachers in England opt for the GTP.
The programme differs from school-centred initial teacher training (SCITT), which is used by around 2,000 trainees, because GTP trainees are paid by the schools as unqualified teachers.
Labour launched the GTP in 1997 to expand on school-based training and to attract older entrants. After complaints by Ofsted that schools-based training was weak, the Government, in 2002, created designated recommending bodies (DRBs). These are usually a consortia of schools with support from universities, education authorities or private businesses. Those that pass Ofsted checks are given full accreditation, which means they can award qualified teacher status.
Stephen Timms, then schools standards minister, said the DRBs would "lead to further improvements in the overall quality of training". But internal Ofsted reports obtained by The TES show that many training providers are still struggling. Of the 47 bodies inspected in 2005, only 13 were given immediate accreditation.
Six of the consortia "should not receive accreditation at this time", even though they trained around 360 teachers between them. Three of these have since abandoned the programme: the South-west consortium in Devon and Cornwall; the Hazelwick school consortium in Crawley; and the Greenwich university DRB, which is separate from its PGCE course.
The other three have demanded to be re-inspected: the Ninestiles federation in Birmingham; the Mid Essex ITT consortium; and Education Management Direct, a private firm working with schools in and around Yorkshire.
Ofsted said the remaining 28 could only get accreditation if they met certain conditions.
The inspectors said that most of the group had to improve so they "can demonstrate that all trainees' subject knowledge needs are analysed, and, where necessary, training ensures they improve their knowledge and understanding of the subject they are training to teach".
Inspections in 2004 led to 41 DRBs being accredited while six withdrew.
The TDA said the quality of teachers trained in even the failing DRBs was not in question because they were judged externally before gaining qualified teacher status.