However, Southwark was one of four previously troubled authorities which this week received encouraging reports from the Office for Standards in Education.

The south London authority was praised for making substantial improvements since its last, critical, inspection in 1999, which led to private company Atkins Education taking over most of its work.

Inspectors reported that Southwark schools had been working effectively with the police in tackling juvenile crime and dealing with concerns arising from the fatal stabbing of 10-year-old Damilola who died two years ago.

But they said that, although individual schools have been promoting racial harmony, the authority’s anti-racism work was unsatisfactory because of important weaknesses in the way it monitored racist incidents.“While the council and schools are committed to improving race relations, they are held back by the lack of fundamental procedures,” the report said.

Inspectors said that although Atkins had not yet helped Southwark pupils reach national levels of attainment, they were optimistic.

Even greater optimism appeared in the report on Rochdale, which inspectors said had undergone “a radical transformation” since a damning inspection two years ago.

The dramatic improvement was partly attributed to Rochdale’s decision to form a partnership with Blackburn and Darwen education authority 15 months ago.

Rochdale’s director of education, Terry Piggot, said the authority’s success showed that such collaborations were a practical alternative to privatisation. “People were comfortable from the start with pairing with their opposite numbers, which would not have been possible if our partner had been an unknown quantity like a private organisation,” he said.

Redbridge, north London, also received an encouraging report, which noted that almost everything it did had improved since inspectors criticised it 18 months ago.

There were also plaudits for Calderdale, first publicly criticised by OFSTED in 1997 after concerns were raised about the then notorious Ridings school in Halifax.

Calderdale’s previous inspection in 1999 had still rated it as unsatisfactory. However, this week’s report stated that the authority “has improved significantly and performs nearly all of its functions at least satisfactorily”.