Peter Housden, director general for schools at the Department for Education and Skills, told a conference last week that the service was expensive and that parents risked basing their school choices on outdated information.
He warned the National Grammar Schools Association that headteachers could also "slalom" their way from school to school to avoid being assessed by Ofsted.
"I am not persuaded that the current section 10 inspections and the public expenditure on Ofsted really delivers for us," he said. "It is a seriously expensive activity."
Mr Housden afterwards said that he had been unaware that press had been present at the event and that the comments were intended for a private audience. Mr Bell defended Ofsted, saying it would be bad for parents and teachers if the watchdog's powers were reduced.
He insisted the service provided good value for money, even though it costs the taxpayer pound;197 million a year. As an example, he pointed out that it had identified more than 1,000 schools in the past decade which had failed to provide pupils with an acceptable education.
"That doesn't seem to me about giving poor value for money or going soft," Mr Bell said. "That's about providing an honest, frank appraisal."
The DfES stressed that Mr Housden's beliefs were personal and did not reflect the department's official, highly positive attitude.