A Muslim free school has been described by Ofsted inspectors as "dysfunctional" and rated inadequate in every category - within a year of it opening.
An inspection at Derby's Al-Madinah school was brought forward after fears were raised over teaching standards.
The report says teachers there are inexperienced and have not been provided with proper training and that the school requires special measures.
The school said it accepted the report and would use it to move forward.
Reacting to the findings, David Cameron told BBC Radio Derby: "If they don't take immediate action to deal with these things then I think it is right it should close and I think it's absolutely right to intervene rapidly when these things aren't working properly."
However, he added: "Let's not use this as a stick with which to beat the whole free school movement - there are now hundreds of schools which have set up as free schools, and on average they have more outstanding and good ratings than established schools.
"When it goes wrong - just as with a state school - you've got to get in there and sort it out, or close it down," he said.
The Ofsted inspection had been due to take place by the end of the year but was prioritised following initial allegations that female teachers were obliged to wear hijabs and boys and girls were segregated.
The school has since written to pupils and staff telling them there is no requirement to cover their hair.
Education minister Lord Nash last week warned the school it faced closure unless discrimination against female staff and pupils stopped.
A spokesperson 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."
Cut and paste
The Ofsted report found that pupils were given the same work "regardless of their different abilities" and the governing body was "ineffective".
It said basic systems were not in place, describing the school as being "in chaos" and "dysfunctional".
Boys and girls had different lunch sittings but the report said this was due to the small size of the canteen.
Inspectors gave the school the lowest ranking - "inadequate" - in every area, prompting the chief inspector of schools Sir Michael Wilshaw to call for it to be placed in special measures.
This means Ofsted will carry out inspections at the school at short notice to monitor improvements. If poor performance continues the school could be closed.
Dr Stuart Wilson, the acting head teacher, said there were "significant and serous problems" at the school and accepted some of the lessons were not meeting necessary standards.
"Are special measures a disaster for the school? Yes, they are," said Dr Wilson.
"It's not where we want the school to be at this time but we accept the report."
In one mathematics lesson, described by Ofsted as "insufficiently challenging", pupils spent the majority of their time cutting out and pasting shapes.
Dr Wilson said the school, which has 412 pupils aged between four and 16, had a lot of issues to deal with but he insisted it did have a future.
"Obviously the report doesn't make pleasant reading for anybody - we don't want to be in this position - we wish we weren't in this position - but what we need to do now is to accept the report in full and use it to move the school forward."
Writing to the school's chair of governors on Thursday, Lord Nash said the Ofsted report was "further compelling evidence of the breaches of the funding agreement I have required you to address".
"Contrary to your suggestion that I have acted prematurely, I am even more convinced of the need for very decisive and urgent action on the part of the trust to comply with all your obligations and remedy the serious failings at the school."
One parent told the BBC: "I know they are teaching my children well. I'm seeing their progress and I have no concerns at all about the school."
Another, Razwana Akbar, said: "I am very angry. They have broken the trust as professional teachers, they have let us down."
Chris Williamson, MP for Derby North, said: "Frankly, the position of Al-Madinah school is now untenable and I would fully expect the school to close and for the children to be found alternative places in the council schools in the city."
Speaking in Parliament earlier, shadow education secretary Tristram Hunt said the Ofsted report was a "devastating blow to the education secretary's flagship policy".
He said: "It reveals that pupils have been failed on every possible measure and parents will want to know why the education secretary has allowed this to happen."
He described the government's free school programme as a "dangerous free-for-all".
"David Cameron and Michael Gove can no longer ignore this issue - it is a crisis entirely of their own making," he said.
But speaking at the weekend, Mr Hunt told BBC One's Andrew Marr programme that although Labour would not open new free schools "along the Michael Gove model", the bulk of existing free schools would be kept open as his party wanted to "keep the good free schools".
Responding to Mr Hunt's more recent comments, the schools minister David Laws said that the government had taken "swift action" to deal with failings at the Al-Madinah free school told MPs that no school would be allowed to "languish in failure".
He also accused Labour of "total and utter opportunism" using the report "to shift its position".