Professor Woodhead conceded his management shortcomings as head of the Office for Standards in Education - three years after resigning from the post.
In October 2000, the standards watchdog had to back down in the face of a legal challenge from Crown Woods comprehensive in Eltham, south-east London.
The school was the first to demand a judicial review after being failed by inspectors. Ofsted agreed to set aside its inspection report just before a High Court judge was due to hear the case. The report was quashed in the week that Chris Woodhead left his job.
Professor Woodhead told the Independent Education conference in London last week: "I thought I had created a culture where access to my office was open but on the day I resigned I realised nobody had had the courage to inform me of a serious mistake that had landed us in court.
"I hold myself responsible. The person in charge should create a genuinely open culture and I had kidded myself that that was the case when it clearly was not.
"It is easier to delude ourselves than face up to the truth and the longer you have been in a place the harder it is to judge.
"The day your staff stop bringing you their problems is the day you have lost leadership," said Professor Woodhead, who led Ofsted for six years.
He is advising Britain's top public schools on developing a new approach to leadership and accused the National College for School Leadership of preaching "evangelical twaddle".
Professor Woodhead is now a visiting professor at Buckingham university researching how to raise private-sector standards.