The youth service in Brent, north London, which helps excluded pupils back to school was inadequate, said inspectors.
Its focus was on recreation rather than learning, standards achieved by the teenagers were low and planning was poor, they said. Curriculum, leadership and management were all criticised. Inspectors said that workers were too controlling and that youngsters were not allowed to make their own decisions. However, they praised steps taken by councillors and senior managers to turn the service around.
Brent is the latest council to be criticised by Ofsted for the quality of its youth service. Almost a quarter of the services inspected in the past year were found to be inadequate.
Margaret Hodge, the children's minister, recently said that badly-run youth clubs were more damaging to youngsters than sitting at home watching television.
The Government is expected to publish the long-delayed green paper on youth later this month.
It will contain plans for a smartcard for teenagers to allow them to pay for out-of-school activities ranging from sports to theatre visits.