The school has been in the national limelight since three members of staff, including David Scott, the principal, were suspended, following abuse claims by pupils. Police are investigating the claims.

The allegations surfaced during the HMI inquiry in April and May, the first in the 63-pupil school for over 15 years. Concern over the inspectors’ initial findings prompted the early publication of their report.

Mr Scott receives scathing criticism, although his deputy is described as “effective”. The inspectors highlight a number of “important weaknesses” in the principal’s management style and practice.

Among other remarks, they say: “There was a pressing need to establish within the senior management team clear expectations for monitoring and evaluating the work of the school and for promoting a culture of self-evaluation. The principal needed to establish a more open and consultative approach to ensure that the views of staff, pupils and parents are sought and considered.”

Teaching in most departments is described as only “fair”.

Brian Wilson, the Education Minister, who last year approved a pound;800,000 grant to the college, said: “There is clearly a great deal of work to be done in Donaldson’s College. That is why I have instructed the inspectorate to monitor the situation in the school and to carry out a follow-up inspection within one year.”

Douglas Osler, senior chief inspector, said: “Our inspection report is very clear. The arrangements for quality assurance in the school are unsatisfactory. Senior management need to monitor and evaluate the work of the school more effectively and encourage all staff to evaluate their work on a regular basis.”

Mr Osler called on the governors to be more active in monitoring the school and draw up immediate plans to implement the inspectors’ recommendations.

The HMI is now preparing a guide to the care and welfare of pupils throughout Scotland to help schools like Donaldson’s, Mr Osler said.