The Government is to intervene in the city's children's services because they need rapid improvement.
Ed Balls, Secretary of State for the Department for Children, Schools and Families (DCSF), said yesterday that the Government's and parents' expectations are not being met by Milton Keynes Council.
He has set targets for the council and will oversee the formation of an improvement board.
The decision follows the publication of Ofsted's Annual Performance Assessment in December, when Milton Keynes joined Haringey, Doncaster and Surrey as a one-star council because of its 'inadequate' children's services.
Mr Balls' decision puts Milton Keynes Council among just eight authorities in the country subject to intervention.
Research carried out in March and April shows that GCSE performance here 'remains significantly behind national averages'.
Results for children from poorer households and ethnic minorities remains low.
The level of qualifications achieved by the age of 19 are 'well below national expectations'.
Permanent exclusions from primary schools are high and the 'weak oversight of schools' finances' has resulted in high budget overspends.
However, Cllr Sandra Clark, cabinet member for children, welcomed the Government's move.
She said: "There have been improvements and the DCSF accepts that. What we need to do now is sustain that improvement and do it more rapidly - we've got to quicken the pace."
She added: "Our goal is to deliver a service that Milton Keynes residents can rightly be proud of. Working in partnership with the Government is a very positive step towards this goal, and fits well with all our improvement activity."
But Conservative education spokesman, Cllr Andy Dransfield, branded it 'another indictment' of the Lib Dem administration.
"It's time that the people of Milton Keynes realised what a shambolic administration we've got. It's falling apart. This is just another one on top of Giles Brook School falling down, the abuse at Gatehouse School, the poor exam results, the one star rating.
This is the final straw."
Mr Balls has stipulated that national education specialist Peter Kemp OBE is at the helm of the board.
It must develop an improvement plan by September 30 and ensure no schools have fewer than 30 per cent of pupils getting five or more higher-level GCSEs, as Leon, Radcliffe and Sir Frank Markham did last year.
Mr Balls said: "When our expectations and the expectations of parents are not being met, our responsibility is to step in and demand improvement.
This is the case in Milton Keynes and I am today announcing a formal intervention to improve children’s services there.
“I have asked that there is a particular emphasis on improving attainment in secondary schools including by narrowing the gap for those in receipt of free school meals and raising attainment of those with special educational needs."
Labour city MP Phyllis Starkey said: "I think it's good that the Government has intervened. It's true that performance has improved, but it's not improving fast enough. I'm particularly concerned about disadvantaged children's performance being particularly bad. If you allow inequality to deepen that's very serious."
Conservative city MP Mark Lancaster added: "This is a sad reflection on the state of children's services in Milton Keynes, but hopefully is the first step in trying to restore the decent service my constituents deserve."