The town where Pride was nearly banned has been criticised for failing its residents and may be taken under government control.

An Audit Commission report found that Doncaster mayor Peter Davies, a member of the right-wing English Democrats, was at war with “vicious” left-wing Labour councillors about how the council should be run.

It said he had been rendered “largely powerless” and that councillors had put their “hatred of the mayor” above their “love of the people”.

The town was criticised for failing to protect children, not meeting the needs of the most vulnerable, delivering poor school and policing services and failing to tackle unemployment.

The report was ordered after two brothers aged ten and 11 attacked and tortured two boys aged nine and ten, and after the deaths of seven children known to social services in three years.

Mr Davies was elected last year and promised to cut out political correctness by banning events such as gay Pride marches. He had to back down he was forced to admit he had no idea how much revenue the event generates for the town.

He also said that there was “no such thing” as child poverty.

The report blamed Labour councillors for preventing Mr Davies from doing his job. They were described as “venomous, vicious and vindictive” and responsible for widespread “bullying and harassment”.

According to the report, they had tried to undermine the mayoral system which, after being introduced in 2001, had shrunk their power base.

However, Mr Davies was also criticised for making “provocative and inflammatory statements”.

The report added that he did “not always act in a way which demonstrates the need for an elected mayor to lead his authority and represent all the people in Doncaster”.

Communities secretary John Denham has said he may use statutory powers to allow the government to take over the council.

Mr Davies said yesterday: “Doncaster has been broken for over 15 years. We now have to work together, under my leadership as elected mayor, to make it a better place, with a council focused on serving its people rather than its own petty jealousies.”

Doncaster council has a “troubled history of poor governance”, the report said. In the 1990s, 21 councillors were convicted for expenses fraud and corruption involving multimillion-pound planning applications.