North Shropshire DC was rated 'poor' by the Audit Commission (LGC, 23 July).
Its score of 22 points is the lowest received, with the exception of Rossendale BC's 20, the commission said.
Leader Barbara Bate (Ind) said: 'We are not making excuses. We are not hiding from the issues. We accept the council is simply not doing a good enough job for local people.'
The council said it performed badly because it had 'aimed to reach a consensus on every key decision'.
'This has resulted in a political structure which is not best suited to reach prompt decisions on strategic issues,' it admitted.
For many years independents were in control of the council, but there is now no overall control.
North Shropshire has six weeks to convince the commission it can put itself in order and avoid Whitehall intervention.