Three senior figures from Haringey Council lost their jobs today over the Baby P tragedy.
Children's Secretary Ed Balls said an independent report had painted a "devastating and damning" picture of failings in the north London local authority's systems.
He confirmed that council leader George Meehan and Cabinet member for children and young people Liz Santry had quit, while the head of children's services, Sharon Shoesmith, has been removed from her post.
Mr Balls said he had ordered a new serious case review into the death of Baby P, with an executive summary to be published by the end of March.
Mr Balls described the conclusions of the inspectors' report as "devastating" and said all of their recommendations must be accepted by Haringey.
He announced that he has directed the council to remove Ms Shoesmith and install Hampshire County Council's director of children's services, John Coughlan, in her place.
Mr Coughlan was seconded to Haringey last month to oversee children's services in the wake of the Baby P trial.
Mr Balls said: "Overall, the inspectors' findings are, I have to say, devastating.
"Their report sets out detailed recommendations, all of which must now be accepted in full.
"Having studied their report I've decided to take immediate action. My first priority is to put in place a new leadership and management team in Haringey children's services to ensure that vulnerable children in the borough are properly protected.
"I have directed Haringey council today to appoint John Coughlan as director of children's services with immediate effect.
"Haringey council will now remove the current director of children's services from her post with immediate effect."
Mr Balls told a press conference the public had been "shocked" by the Baby P case.
He said social workers, police and other officials who dealt with children's safety often worked in "challenging circumstances".
But he added: "They must also be accountable for the decisions and when things go badly wrong people want to know why and what can be done about it."
Mr Balls ruled out a public inquiry into Haringey children's services "for now", saying the immediate priority was making management changes to safeguard vulnerable children in the borough.
He said: "The report from (the inspectors) is a damning verdict on the current management and safeguarding in Haringey.
"In their summary judgment the inspectors say, and I quote, 'There are a number of serious concerns in relation to safeguarding of children and young people in Haringey.
"'The contribution of local services to improving outcomes for children and young people at risk or requiring safeguarding is inadequate and needs urgent action'."
Mr Balls said that today's report uncovered a "catalogue of failings" at Haringey, including:
:: Failure to identify those children and young people at immediate risk of harm and to act on evidence;
:: Agencies generally working in isolation from one another and without effective co-ordination;
:: Poor gathering, recording and sharing of information;
:: Inconsistent quality of frontline procedures and insufficient evidence of supervision by senior management;
:: Inconsistent management oversight of the assistant director of children's services by the director of children's services and the chief executive;
:: Incomplete reporting of the management audit report by senior officials to elected councillors;
:: Insufficient challenge by the local Safeguarding Children Board to council members and frontline staff;
:: Over-dependence on performance data which was not always accurate.
Mr Balls added: "The inspectors also highlight - and this is something which really worries me - a failure to talk directly to children at risk.
"Where children were not seen alone, it worries me greatly that the inspectors found little evidence of management follow-up to ensure that children suspected of being abused were properly heard and able to speak up without fear."
Mr Balls revealed that Ofsted inspectors judged that the Serious Case Review into Baby P's death was "inadequate".
Of the nine individual agency management reports on which the Serious Case Review was based, the inspectors found just three to be "good", one to be "adequate" and five to be "inadequate".
Reports from Haringey Children's Social Services and Haringey Teaching Primary Care Trust were found to "lack rigour in their analysis and to significantly undermine the integrity of the Serious Case Review".
Mr Balls said: "They conclude that as a result, the Serious Case Review misses important opportunities to ensure lessons are learnt."
Health Secretary Alan Johnson said there had been "unacceptable" failings in communication by local NHS organisations, and urgent lessons had to be learnt.
He announced that the Healthcare Commission would be examining whether organisations were applying national child protection standards "as vigorously as they should be".
Mr Johnson added: "The Healthcare Commission has also agreed to review the role of local NHS organisations in Haringey in the circumstances of the death of Baby P, looking in particular at communication between healthcare professionals and organisations and awareness of child protection procedures working closely with the new Serious Case Review."
NHS chief executive David Nicholson is ordering all health service bodies to review their child protection arrangements, he said.
Mr Balls said it was "just unacceptable" that the serious case review into the death of Baby P had been found to be inadequate.
He said he was directing Haringey council to appoint a new and independent chair of its local safeguarding children board.
Graham Badman, former director of children's services in Kent, is to take up the post this week and will carry out a new serious case review.
Mr Balls said: "He will submit the new serious case review to Ofsted by the end of February for evaluation and he will publish the executive summary of the new serious case review - which must provide a full and comprehensive and fair summary of the confidential serious case review - by the end of March.
"This new serious case review will require the commissioning of new management reports from and the cooperation of all agencies involved in child protection in Haringey, and all agencies must also now implement the wider recommendations made in the inspector's report."
He added: "Our priorities must be to put in place the leadership and management team in Haringey children's services that can ensure that vulnerable children in the borough are properly protected, appoint a new independent chair of the local safeguarding children's board, to begin a new serious case review into the death of Baby P and to ensure that action is taken across the country in response to those serious case reviews that have been judged to be inadequate."
Mr Balls said he would be "astonished" if Ms Shoesmith received any pay-off or compensation for losing her job, but stressed that this was a decision for Haringey councillors to make.
He said: "Her employment relationship is with Haringey and so the normal employment and legal procedures will take place, but I have to say I think most people would look at this report, look at the clear evidence of management failures, and say that this kind of failure should not be rewarded with compensation or pay-offs.
"That's a matter for Haringey. I have to say, I would be astonished if elected members in Haringey chose to do that, but it is a matter for them."
Asked whether frontline social workers who dealt with Baby P would lose their jobs, Mr Balls said that such decisions will be taken by Mr Coughlan, who will immediately address the staffing issues raised by the case.
Ofsted today published an evaluation of serious case reviews which highlights that there is "variable quality" in them across the country, Mr Balls said.
Lord Laming, who carried out the inquiry into the death of Victoria Climbie in 2000 and who is looking at children's services across the country, had written to Mr Balls recommending that all future reviews be independently chaired.
But Mr Balls said he wanted to take "further action" today and was ordering each local authority which had produced a serious case review judged to be inadequate to set up a panel to reconsider the review.
Lord Laming had also said in his letter a public inquiry into children's services in Haringey would "set back the progress that is being made in many places and divert attention from the action needed now to keep children safe in Haringey".
"I agree with this judgment," Mr Balls said.
He added: "There is nothing that I can do, that any of us can do, to take away the terrible suffering that was inflicted on Baby P during his short life.
"The sad fact is, as the inspector's report today makes clear, and I quote, 'Baby P had been subject to a child protection plan from December 22, 2006 following concerns that he had been abused and neglected'.
"He was still subject to this plan when he died.
"That is the most serious failing of all, and we will not rest until the very best child protection arrangements are in place in Haringey and across the country."
Ofsted inspectors will now be carrying out unannounced annual inspections of children's safeguarding services in every part of the country, Mr Balls announced.
Mr Balls said the inspectors' view was that the nature and scale of management failure in Haringey was "exceptional", but said this was "no reason for complacency".
He said: "We will take whatever action is needed in any part of the country when it is highlighted to us by inspectors or through Serious Case Reviews.
"The advice to me is that Haringey is particular and the case of Baby P was particular, but that doesn't mean that there aren't ways in which we can apply the lessons from this report more widely across the country and act upon it, and that's what we are determined to do."