The inspectors praised much of the work of the authority, which was created three years ago. But while the partnership with schools was described as "powerful", the Office for Standards in Education found officers were not doing enough to raise standards.
Attainment at key stage 1 in 1999 was in line with national norms but a subsequent decline through other key stages led to GCSE results well below national averages.
Inspectors said a school improvement service, which started in April, was now giving clear direction and support.
Portsmouth has one of the lowest unemployment rates in England, but also pockets of severe deprivation. It has one primary and two secondaries in special measures. Another 25 are causing concern. Inspectors said support for schools with problems was iproving.
City education officer John Gaskin, who took over at the end of 1998, was found to have done much to rebuild the LEA's credibility by providing strong leadership and strategic direction.
Inspectors said the authority, which had 13 strengths and three weaknesses, now performed the majority of its functions at least effectively.
Chair of education, Fred Warner said: "Most importantly, OFSTED has stated that we have the capacity to bring about improvements. We have achieved much despite a shaky start."
Support for numeracy in primaries
newly-qualified teacher support
early years education
support for looked-after children and SEN pupils
raising standards in secondaries
procedures for evaluating the
effectiveness of school improvement support
councillors do not subject the education service to systematic scrutiny