The Welsh Government is calling for urgent action to improve education services in Pembrokeshire.
It follows the publication of two highly critical reports - one of which identified serious failings in procedures to protect children from abuse.
The other report criticised the quality of education services.
Education Minister Leighton Andrews told Pembrokeshire council it has two months to come up with an action plan.
The authority has recently appointed a new education senior management team, which according to inspectors "has focused attention on areas where performance is slow to improve or declining".
It says it is taking action to address issues.
The damning conclusions of both reports are likely to bring the overall standards of education in Wales under further scrutiny, says BBC Wales Education Correspondent Ciaran Jenkins.
Concern about the state of education in Wales was prompted in November by the findings of Pisa (Programme on International Student Assessment) that 15-year-olds in Wales were lagging well behind the rest of the UK and a number of eastern European nations.
The Welsh Government is sending in a team to monitor Pembrokeshire Council after the Care and Social Services Inspectorate for Wales (CSSIW) and school inspections body Estyn identified 25 cases of alleged child abuse in the education services.
The investigation was triggered by the case of primary school head teacher David Thorley, who was jailed in 2009 for sex assaults on children in his care.
The report criticised the council for its "wholly unacceptable" handling of the child abuse allegations.
The separate Estyn report placed pressure on those responsible for the standards in Pembrokeshire schools, saying the "local authority's policies and systems for safeguarding children and young people are not fit for purpose".
It also found that the local authority had "unsatisfactory prospects for improvement" because of a "systematic corporate failure to respond sufficiently to safeguarding issues".
Council officers were criticised for the quality of information they share with councillors.
In a statement, Education Minister Leighton Andrews said: "The failings identified in Estyn's report on the quality of Pembrokeshire's education services for children and young people, as well as their joint CSSIW report into safeguarding and protecting children in education services in Pembrokeshire, are wholly unacceptable.
"It is clear that strong and decisive action by Pembrokeshire County Council is urgently needed to rectify these problems.
"The minister for education and skills will consider the evidenced decline in school standards and other issues about education services, and expects to see the council's action plan in response to this within two months."
The council now has until 9 September to detail the actions it has already taken in response to the joint CSSIW and Estyn investigation and produce an action plan.
This will need to be backed by the full cooperation of council members and senior officials.
Pembrokeshire is the second local authority to receive an "unsatisfactory" rating from the schools inspectorate in this cycle of inspections.
The first was Blaenau Gwent, which could now have its schools run by a taskforce from another authority.
Powys, Wrexham and Cardiff's education services were merely "adequate", while Neath Port Talbot and Conwy were rated "good".
No authority has yet received an "excellent" verdict.
Pembrokeshire council leader, John Davies, said: "The Estyn report raises a number of educational issues that the council is already addressing, particularly the need to raise GCSE standards in secondary schools.
"This was reported to the children and families overview and scrutiny committee in November 2010 and in April 2011."
He said measures undertaken included improved performance analysis and reports for each school, a new "assertive mentoring programme" for students and more challenging target-setting arrangements.