A special needs school which rewards pupils' good behaviour by letting them out to smoke has failed its inspection.

Ofsted inspectors gave Cornfield School, where the headteacher and assistant headteacher are both on long-term sick leave, the lowest possible grade in 22 out of the 26 areas they assessed.

The school has been placed in special measures, which means if it fails to improve in future inspections, it could face further action including the threat of closure.

The team reported "exceptionally low" standards of achievement among pupils and "unsatisfactory" provision for personal development at the school, in Cornfield Close, Littlehampton.

English and maths teaching was judged poor due to staff absences and "uninspiring" teaching after the visit on March 13.

The inspectors said aggressive bullying by some pupils left others feeling unsafe, and criticised activities on offer to the school's six female pupils.

Their report, published this week, says: "The long-term absence of two of the three members of the senior leadership team has taken its toll.

"Inadequate leadership and management have led to an unsatisfactory quality of education, and the school has not improved sufficiently since the last inspection."

The school's headteacher has been on sick leave since September 2006.

The inspectors said Ric Turney, who became temporary headteacher at the school in January, had recognised the problems but had not had time to make changes.

They criticised a policy of rewarding good behaviour by giving the children sweets or allowing them off school grounds, which some used as a chance to smoke.

Lead inspector Mick Megee wrote to pupils after the visit.

He said: "You are not involved enough in setting your own targets so you know what to do next.

"The school does not give you as much support as it should to help prepare you for your future lives or to live a healthy life, and there is too much bullying.

"I hope you will do your best in your work, and perhaps those of you who smoke could cut down or even stop completely."

Mr Turney and chair of governors Peter Surtees issued a statement through West Sussex County Council saying the report painted an unfair picture.

Mr Surtees said: "The report recognises that the governing body and the local authority had identified issues and had put in place a plan which is now beginning to show improvements."

They pointed to the inspectors' praise for sensitive treatment of behaviour difficulties and mutual respect and trust between students and staff.

A spokeswoman for the council acknowledged there are serious issues of leadership and management in the school.

She said: "These issues were already being addressed at the time of the inspection and good progress is being made.

"The county council will continue to work with the school to ensure that all areas for development are speedily and successfully addressed."

Two of Littlehampton's primary schools, St Catherine's Catholic and Flora McDonald Junior, have been put into special measures by Ofsted inspectors who said their performance was unacceptable.

The town has been earmarked to house the first academy in West Sussex in a £27 million proposal to replace Littlehampton Community School.