Legislation to let inspectors shut schools or sack senior staff is expected to be announced in the Queen's speech next week.
The newly re-elected Labour government has promised it will introduce an Education and Skills Bill that will give parents greater choice and crack down on ineffectual leadership.
It said that the bill will "allow successful schools to expand by taking over less successful schools and (that) there will be new powers to tackle failing schools".
Although Ofsted inspectors can already rate a school as failing, it is presently up to local authorities to decide whether it should be closed.
The bill is expected to grant inspectors powers promised in Labour's manifesto which will make them more responsive to parents and allow them to close schools or replace the management.
But the plans have baffled and angered teachers' unions.
John Dunford, general secretary of the Secondary Heads Association, said he could not understand why a bill was needed to let successful schools take over others, as legislation allowing schools to do this through federations was introduced three years ago.
Mr Dunford said headteachers would be opposed to letting inspectors shut schools.
"It's a nonsense and it looks like a mistake," he said. "Decisions about shutting schools have to be made by local authorities because they take responsibility for what happens to the pupils next."
Mr Dunford said the change to Ofsted's role would damage improvements in relations between schools and inspectors.
The education bill is one of eight bills the Government has revealed will be in the Queen's speech on Tuesday.
The early list does not include the charities bill, which was abandoned ahead of the election, although Labour has pledged to reintroduce it.
Private schools have welcomed the bill, despite the risk that it could lead to some losing charitable status if they fail to pass a public benefit test.
Labour's reduced majority will make it tougher for the party to push through the education bill and to re-introduce its school transport bill, which was opposed by the Conservatives and Liberal Democrats because it would lead to charging for school buses.
A Liberal Democrat education adviser said the party would fight any moves to let inspectors close schools.
"It's an utterly ludicrous idea," she said. "Inspectors should be working in a more constructive and supportive way with schools."
Ofsted said it could not comment on the plans. However, the National Association of Educational Inspectors and Consultants said its members might be reluctant to use powers to shut schools if they felt they would damage their relationship with teachers.
cyril taylor, Opinion 23