Leaders of a Muslim boarding school "undermined British values" by allowing its library to stock a book calling for homosexual people to be punished.
The book, Islam on Homosexuality, was found by Ofsted during a visit to the Islamic Institute of Education.
Ofsted said it included "inappropriate content" unsuitable for pupils.
The Dewsbury-based school said all books in its library were now consistent with its "unequivocal commitment to British values".
Excerpts from the text, which had been stamped as an official library book by the school, included sections on punishments of individuals because of their sexuality.
The report noted: "There is also a paragraph in the book entitled 'putting to death'. In this paragraph there is a statement '...the evil doers should be put to death'."
The watchdog said the book was in breach of the Equality Act 2010 and leaders' failings around the issue had undermined "fundamental British values".
Although the headteacher was clear the book should not be in the school library, other leaders claimed it was there for "research purposes", according to the report.
Inspectors, who rated the school inadequate, also said curriculum plans "do not take into account sufficiently the aptitudes and needs of all pupils".
Safeguarding failings were flagged up as well as concerns that pupils have no "access to safe recreational areas outside".
The institution, which is located within the grounds of the West Yorkshire town's Makazi Mosque, has 234 boys on its roll aged between 11 and 25.
Following its last full inspection in February 2020, the school submitted an action plan to the Department for Education but it was found to be unacceptable.
Ofsted said leaders had not updated the action plan since.
In a statement, the institution said "The majority of the areas for improvement identified have now been rectified, and trustees, leaders and staff at the Institute are continuing to work with rigour, diligence and integrity to ensure that all appropriate standards have been met."