It found that schools, both private and state, were improving but were still unable to protect the most vulnerable young people.
Children in special schools were being hurt by teachers using unacceptable force to restrain them, said the inspectors. Young people said some staff did not know how to control them without causing pain.
Physical control techniques were sometimes used as punishments, said the inspectors, when they were intended to prevent injury, serious damage to property or a severe breakdown in order.
Some teachers were also unable to spot the children being abused or neglected outside school, particularly those with special needs. The inspectors said that the quality of child protection systems and training in schools was variable.
The Commission for Social Care Inspection visited all 555 state and independent boarding schools. It found that 60 per cent did not meet all the national minimum standards for child protection. Around 40 per cent of residential special schools also failed to meet these standards.
The inspectors called for:
* better sharing of information, especially in cases involving asylum-seeker pupils and those in foster care;
* more emphasis on alerting children to the risk of being abused by people they know;
* more rechecking of staff criminal records, particularly of those in boarding schools; and
* improved child protection in out-of-school educational schemes such as sports, music and language clubs.
The report, due to be published yesterday, will be disappointing for ministers as it follows the inquiries into the Soham murders and the death of Victoria Climbie.
The Government had hoped its "Every Child Matters" strategy, and the accompanying Children Bill last year, would encourage public services to collaborate more closely on child protection.
The inspectors said there was evidence that partnerships between schools and other agencies were improving. However, communication between teachers and social workers was still often poor.
This week, Beverley Hughes, the children's minister, said teachers would have to change the way they worked to meet both the academic and welfare needs of pupils.
Addressing a conference organised by the Teacher Training Agency in London, Ms Hughes said: "This does not mean asking teachers to be social workers or to take on more work. But they will need to be focused on supporting and enabling pupils to learn as well as working closely with other professionals as they never have before."
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Safeguarding Children is at www.safeguardingchildren.org.uk