No decision has yet been taken on what elements of Haringey's education service are to be hived-off following its critical Office for Standards in Education report.
But the consultants drafted in to advise on improvement describe its education department as "dysfunctional". In a report issued this week, Capita recommended that the council, which it said lacked politial leadership, be "challenged by an external stakeholder body".
The inspectors said Haringey had failed to perform to an acceptable standard, did not provide value for money and had not communicated its commitment to education to its schools.
The borough languishes near the bottom of the league tables for key stage 2 English and maths tests and came 145th out of 149 education authorities for proportion of pupils attaining five or more top grade GCSEs.