The Further Education Funding Council is so alarmed at the report that it is to send its special investigations unit into the college - the unit's first job since being formed earlier this month.
The college received eight (out of 10) grade 4s (the second-
bottom classification), with its management, governance, quality assurance and support for students all judged unsatisfactory.
Chris Chapman, the principal since September 1997, has been suspended by the governors and John Gould, director of marketing and business development, will be acting principal.
Tom Coventry, chair of governors, said: "This suspension in no way prejudges the (FEFC) investigation. This is a precautionary action while the investigation takes place. This is standard procedure in the circumstances."
He said the board fully supported Mr Chapman and were confident he would be re-instated.
The funding council said the investigation was necessary because of the poor report, a deteriorating financial osition "and the receipt of complaints".
David Melville, chief executive of the council, said: "This (report shows) a decline in standards of teaching since the college's previous inspection (in 1996). The governors and managers have only recently begun to address the problems of low levels of retention and achievement with support from the Standards Fund."
Inspectors said there had been only limited progress in addressing the long record of poor academic performance. There had also been a failure to improve retention rates. The academic board did not meet at all between December 1997 and May 1999. The health and safety committee had not met for more than a year.
NATFHE, the lecturers' union, has been in a dispute with the college over the use of unqualified teaching staff, a proposal meaning some 45 redundancies, and a "growing culture of intimidation".
It said a third of teaching staff had been threatened with disciplinary action, with all cases later dropped. Paul Mackney, the union's general secretary said:
"Basildon is selling short both its students and staff." By Ngaio Crequer