Incompetent teachers escape punishment because heads consider the profession's disciplinary body "pointless", a report commissioned by the organisation itself has warned.
Schools avoid referring the worst teachers to the General Teaching Council for England (GTC) because they believe it has "no teeth" and its systems of suspending or banning teachers from the workforce are "inappropriate", the report says.
Heads even write good references for incompetent teachers to avoid long GTC cases and to speed up their departure from the school.
Researchers trying to identify why so few bad teachers are reported to the GTC say the lack of referrals is caused by "frustration" at how long the process can take, and the reluctance of headteachers to take "severe" action. They say GTC cases fail to improve the performance of those who are incompetent and have a negative effect on other teachers.
The study also concludes that unions, Ofsted and the Training and Development Agency for Schools are not "certain" the GTC is raising teaching standards and the credibility of the profession.
The research was carried out by the National Centre for Social Research and commissioned by the GTC and the Department for Children, Schools and Families.
Between 2001 and the end of October 2008, just 153 cases of incompetence were referred to the GTC and only 59 were heard. Researchers found school leaders prefer to deal with problems themselves, meaning incompetent teachers just move on to other primaries and secondaries.
"Variation in expected teaching standards between schools could mean that a teacher who might otherwise be judged to have a capability issue could be welcomed into a school at which expectations of teachers were lower, or that was perhaps struggling to recruit teachers," the report said.
"Procedures could also have some negative impacts on the school and other teachers in cases where they split staff rooms, though it was also identified that pupils and colleagues would benefit from a teacher with performance issues either improving or leaving the school."
John Bangs, head of education at the NUT, said the report was "damning" for the GTC.
"The only option for headteachers is disciplinary action, but it's clear they don't want to do this because it destroys relationships in schools," he said. "What this research should have done is look at the reasons for incompetence - top-down pressure on headteachers which is affecting their staff."
GTC chief executive Keith Bartley admitted the report "reveals inconsistency of understanding and practice" in the treatment of incompetent teachers.
"It provides us with a platform to continue to work with DCSF and local authority colleagues to strengthen the system; to ensure that performance issues are tackled more effectively at local level in the first instance and that cases of incompetence are referred to the GTC as they should be to protect the interests of children and young people," he said.
Schools minister Vernon Coaker said: "We will work with the GTC, the TDA and our social partners to address the issues raised by this report, starting with a review of the performance management guidance later this year."