A NURSERY that opened next to a bail hostel for dangerous offenders has put children at risk through a catalogue of failings, according to education watchdogs.

An Ofsted inspection of Smiles on Faces, St Peter Street, Blackburn, discovered that the public could gain access to children and an office storing youngsters' confidential records.

It found that children's welfare was "critically compromised" as they were allowed to travel from the nursery unescorted in taxis and, despite some staff having some basic training in child protection, they were unsure of who to report any concerns to.

Staff were not checked for their suitability, youngsters were at significant risk of infection because of poor hygiene procedures and teaching was inadequate, with children not being taught right from wrong, the inspection discovered.

In June, The Lancashire Telegraph revealed how convicted paedophiles were among offenders being housed in the Howarth House bail hostel, just a few yards away At the time bosses at the nursery said they were confident no adults could gain access to the nursery.

And police and the probation and prison services operating through the Multi-Agency Public Protection Arrangement (MAPPA) said there was no danger to children.

Two weeks later Home Secretary, John Reid, ordered that all child sex offenders be moved from the hostel as part of a national policy change to protect children and probation bosses insist there are now no child sex offenders in Haworth House.

Nursery bosses said this week that the owner, Ann Wainwright, had been seriously ill, and a number of staff had now been sacked as a result of the problems, which it was moving swiftly to address. They said the office highlighted in the report now had its door locked.

The centre is working with chiefs at Blackburn with Darwen Council to sort out the situation.

But the leader of the Tory opposition on the council, Coun Colin Rigby, said the centre was lucky nothing dire had happened to any of the children and that the failings had obviously been there for a significant amount of time, certainly since before June.

He said the situation was a "mess" and demanded to know how the council had let the privately run nursery's standards slip so far.

A spokesman for the Multi-Agency Public Protection Arrangement (MAPPA) which manages offenders for the police, probation service and prison service, said agencies involved took on trust what they were told about security arrangements at the nursery.

He added: "The two premises have co-existed and there has never been an incident, we risk assessed each offender and worked closely with the owner."

The inspection was carried out on November 6. Smiles on Faces management said they had requested it because of their own concerns.

Along with the catalogue of failings, inspectors expressed concerns about the quality and standard of care and nursery education, both of which were found to be inadequate.

The report said: "Management withint the setting is seriously inadequate."

Inspectors said that at the last inspection in 2004 three actions were raised that had still not been resolved, relating to the recruitment and suitability of staff, the maintenance of the building and the revision of the child protection policy to include the procedure in the event of an allegation been made against a member of staff.

A further requirement, that effective procedures are in place for checking that staff were suitable, has still not been completed and as a result children's safety and welfare is compromised, they said.

An Ofsted spokesperson said: "Ofsted has told the registered person to make a number of improvements to safeguard the welfare of children and to improve the quality of early education offered by the nursery.

"We continue to monitor and review the situation. We may decide to take further enforcement action if the registered person does not make the improvements required."

The nursery was set up in 2003 in a site among a list of available sites provided by the council and has a special emphasis on children with special needs.

A nursery statement said Mrs Wainwright had been seriously ill for the majority of 2006, requiring several hospitalisations and chemotherapy.

It said she took back its management in September and several issues were then identified.

It said: "There was an immediate overhaul of staffing and several positions were terminated.

"The company is moving very swiftly to act on all recommendations of the report and are putting in measures that will bring up the provision to the required standards."

It said the door allowing access to the office and an area of the nursery was now locked.

It added: "Smiles on Faces is committed to high standards of care."

Coun Maureen Bateson, the council's executive member for children's services, said: "We will continue to work with Smiles on Faces."