Maurice Kogan, who chaired the teams inspecting Staffordshire and Kirklees education authorities, said that good work done by OFSTED was being clouded by statements from the chief inspector for schools.
He urged action to assess the impact the quango has had on schools and questioned its competence in investigating local authorities.
Professor Kogan said it was odd that statutory evaluation of local authorities was to be given to an organisation largely grounded on knowledge of schools. He claimed that the Audit Commission would have been better suited to the job.
"The Audit Commission has the advantage, too, of being trusted because it starts with no bias against local government, and is governed by independent commissioners who are unlikely to encourage loose cannons to fire off at will," he said.
Officials at the Audit Commission are said to be angry that OFSTED has been asked to conduct local authority reviews. Councils have long been evaluated for their management efficiency by district auditors, working within the commission's guidelines.
Mr Woodhead has already said he believes there is no strategic role for LEAs. Professor Kogan said: "It is not for the chief inspector to play the role of Ezekiel. That is a job for the politicians, however weak they are. They are allowed to play prophets, the chief inspector is not."
Professor Kogan, professor of government and joint director of the Centre for the Evaluation of Public Policy and Practice at Brunel University, spoke out as the Education Bill, which covers LEA inspection, gained its second reading this week.
The Bill gives the chief inspector the power to select authorities to inspect from January 1988. Inspections would cover any function of a council's work on education, and authorities would be required to draw up action plans to show how they intended to respond to any criticism. They would almost certainly cover local authority's management of schools schemes, how budgets are determined and allocated.
Many authorities are unhappy about the spin Mr Woodhead might put on the OFSTED reports which, they fear, might develop into league tables of councils. They also fear that some of the areas OFSTED will investigate, and to which it will hold them to account, will be decided by their political masters.
The Standing Conference of Chief Education Officers and the Society of Education Officers have been developing a framework for all LEAs, which has been applied in Staffordshire and Kirklees, to use in reviewing their own work.
But Professor Kogan said Mr Woodhead was already marginalising the work on inspections that local authorities were doing themselves. "He persists in referring to Staffordshire's evaluation, in which OFSTED played a most helpful part, as an OFSTED inspection - which it was not - and takes no notice of what the White Paper, mealy-mouthed about LEAs in general as it was, had to say about LEA evaluation," he said.
Professor Kogan told CEOs at the conference that a practitioner, not an inspector-led, system of review was vital. He said local authorities were likely to commission reviews to help them to do their job better, while inspections by OFSTED would be summative and corrective.
"The right of OFSTED to make inspections will carry the force of law . .. While the HMCI is on record as saying that LEAs will be judged according to their own criteria, that has not been the experience of the schools," he said.
"It almost seems to me that some schools are like a rabbit transfixed in the headlights of OFSTED. The amount of time engaged in worrying about OFSTED is remarkable.
"There may be arguments for some displacement of professional discretion by exogenous and central value setting, but for how long can it go on without suppressing the creativity of practising teachers?" CEOs urged OFSTED to open up its database of research to them while David Hart, general secretary of the National Association of Head Teachers, said the OFSTED model of inspection for local authorities was a disaster.
"It will consider the quality of teaching and learning in schools and will not ask the sort of questions that need to be asked - the awkward questions with answers that might not lay the blame at the door of local government but at that of central government," he said.