A college has been told it must improve standards or face closure after it received a dismal rating from Government inspectors.

Lambeth College, the borough’s largest education provider, received an overall rating of “inadequate” in its most recent Ofsted inspection – the lowest mark that can be given to a school or further education college.

It was judged to be failing in three out of six key criteria, including management and leadership, outcome for learners and capacity to improve.

It was given “satisfactory” ratings for quality and diversity and quality of provision, and one “good” rating for safeguarding procedures.

Key subject areas including business and the humanities are also understood to have been judged as “inadequate”.

A final report is due to be published later in March, but it is understood inspectors criticised the college for maintaining the same standards as previous years, while other further education colleges in London have improved.

In 2010, the college was also deemed to have made “insufficient progress” in increasing attendance rates.

And in 2009, inspectors found it had made “insufficient progress” in terms of improving standards across the institution, noting that pass rates had declined.

The college has seen a sharp decline in student numbers from 21,000 in 2004-05 to 13,200 in 2010.

It has also been hit by severe budget cuts, losing more than £9m funding from Government since 2006.

Teachers and staff went on strike in 2010 to protest against impending redundancies and further budget cuts. Last week, the college’s new principal, Mark Silverman, said he was “looking forward” to taking the institution on a “positive journey of improvements”, but dismissed accusations it was failing.

A spokeswoman for the college said it had received “good” ratings for its work with students who have English as a second language and with students who suffer from learning difficulties.

It was also praised for listening and responding well to students and for its work with employers, she said.

A spokesman for Ofsted would not comment on the recent inspection.