The headquarters of Hull City Council

The report says the authority's leadership is weak and there is a political culture that is "immature and confrontational".

It is the body's second critical judgement on the way Labour-run Hull runs its affairs in the last year.

The commission says that not enough has been done to address problems identified in the first report and is recommending that the government appoints a chief executive.

Council failing

The previous chief executive, Jim Brooks, retired from the post on Wednesday following a suspension due to allegations that he was involved in the leaking of the original audit report.

The city is the home of Deputy Prime Minister John Prescott.

Local government minister Nick Raynsford said: "I am extremely concerned by the findings of this report and that insufficient progress on improvement has been made by the council.

"I met the council's senior politicians yesterday (Thursday) to register my concerns and to discuss how these are to be addressed."

He said "A small team will report back to me as soon as possible, giving advice on what action needs to be taken to address the shortcomings identified in the Audit Commission's report."

The report found that poor political leadership and governance were continuing to prevent the council from dealing with its failings.

Slow response

Audit Commission chief executive Steve Bundred said: "The council still needs to focus on outcomes and prioritise its action to resolve the fundamental issues around political leadership, governance and housing.

"Local people in Hull have a right to a council that understands and meets their needs, and has a strategic vision for the future of their community."

Hull City Council says it is ready to work with outside agencies to turn the authority round and bring lasting improvements to the way it is run.