Derby City Council said the report was rubbish and set out reasons why it is 'not a candidate for any type of intervention'.
Labour leader Robert Jones was angered by the article, and pointed out services in Derby had been praised by the Best Value Inspectorate, external auditors and the Improvement & Development Agency. Health secretary Alan Milburn listed Derby in his top 14 performing social services departments.
'Far from being a failing authority, Derby is above average,' he said.
'I have spoken to reliable, senior government and Audit Commission sources who are as surprised about the LGC story as we are,' chief executive Chris Bocock said. '[Your] article ends with a government spokesman dismissing the statement and yet you print a potentially damaging piece.'
Simon White, chief executive at Waltham Forest LBC, also named, said: 'Waltham Forest has not been identified as a failing authority by the government.'
A handful of councils are in line for intervention by central government.