The latest education select committee report is based on former chief inspector Chris Woodhead's oral evidence to the committee last November - a session which degenerated into a war of words over his aggressive approach.
The report focuses on Ofsted's lack of accountability and the controversy caused by the public comments of its chief inspector. It recommends the creation of a board of directors to supervise Mr Woodhead's successors and American-style confirmation hearings by the committee.
The report accuses Mr Woodhead of not taking early years education seriously and failing to deal with Ofsted's alleged mishandling of race relations issues. It says: 'Ofsted should have acted more swiftly to bring their concerns to the attention of the Commission for Racial Equality. We are concerned it took so long for them to respond to the CRE's approach.'
Graham Lane, chair of the Local Government Association's education executive, said: 'Ofsted showed a lack of understanding of the problems of second-language students and special needs. Teams from all-white areas were parachuted into schools with large ethnic minorities and confused these two quite separate issues.'
The report concludes: 'We intend to press for a debate on the work of Ofsted to enable the whole House to consider the future conduct of this non-ministerial government department, which has such a key role to play in encouraging the raising of standards in the education provided to children.'
Mr Lane said he was disappointed the report did not recommend changes to the tendering process for choosing inspection teams.
'Ofsted should use those working in the profession. Some of the people doing inspections are retired or failed heads with little idea of current teaching practice. A complaints procedure is needed even though there aren't many mistakes.'
Press reports since Mr Woodhead's resignation say the Conservative Party has approached him to act as shadow education secretary from the Lords. The party has refused to comment on the claims.