Report leaked to the Guardian says teachers at the controversial free school in Derby are inexperienced and not properly trained

A controversial free school at the heart of a row between Labour and the Tories over Michael Gove's reform programme will be condemned as "dysfunctional" in a devastating official report.

An Ofsted report, due to be published imminently, declares that the Al-Madinah Islamic school in Derby is "in chaos" and has "not been adequately monitored or supported".

The report, which has been leaked to the Guardian, says teachers at the faith school are inexperienced and have not been provided with proper training.

Pupils are given the same work "regardless of their different abilities" and the governing body is "ineffective", according to the report which was commissioned amid reports of irregularities at the school.

An Ofsted inspection had been due to take place by the end of the year, but was brought forward by two months after allegations that women teachers were obliged to wear headscarves and that pupils were segregated. The school, which has 412 pupils aged between four and 16, closed during the inspection.

The Ofsted report says that boys and girls eat lunch in separate sittings, although it puts this down to the small size of the canteen. Older boys and girls are seated on either side of classrooms although younger children sit together.

The report concludes: "This school is dysfunctional. The basic systems and processes a school needs to operate well are not in place. The school is in chaos and reliant on the goodwill of an interim principal to prevent it totally collapsing."

Tristram Hunt, the shadow education secretary, said the Ofsted report showed that Michael Gove's reform programme, in which the new schools are freed from local education authority control and allowed to appoint unqualified teachers if they choose, has become a "dangerous free-for-all".

Hunt told the Guardian: "What this report exposes is that David Cameron and Michael Gove's Free School programme has become a dangerous free-for-all: an out of control ideological experiment that has left 400 children losing an entire week of learning."

The Ofsted report gives the school the lowest "inadequate" ranking in every area, prompting the chief inspector of schools Sir Michael Wilshaw to call for it to be placed in special measures. The inspectors also complain that teachers without proper qualifications have been given key posts.

"Staff have been appointed to key roles for which they do not have qualifications and experience. For example, most of the primary school teachers have not taught before and the head of the primary school is experienced in teaching secondary-aged pupils only," the inspection report says.

It says that teachers' assessments of work against the national curriculum are "over-generous" and pupils are making poor progress at Key Stage 3.

Primary school teaching is characterised by "poor lesson planning" with all pupils given the same work regardless of ability. In a maths lesson pupils were "insufficiently challenged" and spent most of the 55 minutes cutting out and pasting shapes and "learned little that was mathematical".

The report also says there is inadequate oversight of the school. It says: "This is a school which has been set up and run by representatives of the community with limited knowledge and experience. Leadership and management, including governance, are inadequate and have been unable to improve the school."

Hunt said: "Pupils have been failed on every possible measure and parents will want to know how this was not picked up earlier – especially as Ofsted identified that this school was not meeting the basic requirements on child protection before it was opened. Cameron and Gove can no longer ignore this issue – it is a crisis entirely of their own making.

"Governors have failed to ensure children are safe in the school. They have also failed to appoint staff with appropriate skills, knowledge and experience to adequately monitor the work of the school properly. As a result, governors have not been able to hold the school sufficiently to account."

Lord Nash, the education minister, wrote earlier this month to the chair of the governors, Shazia Parveen, warning that he would be forced to end the school's funding agreement unless swift action was taken. In response to Nash's letter, the school said recently: "The trust and governing body remain fully committed to doing what is in the best interests of our pupils, their parents and the community as a whole. However, at this point, the school is struggling to see how we are being treated comparably with other schools. Consequently, while we intend to co‐operate fully with the Department for Education, we have also sought the advice of the school's solicitors."

The Department for Education said: "We were already investigating this school before allegations became public. We discussed the problems with Ofsted and it launched an immediate inspection.

"We have received a response from the Al-Madinah Education Trust as well as a report on the school from Ofsted. Any decisions made will take into account all the available evidence."