Teenagers have been let down by an exams system that is abused by teachers who are under intense pressure to achieve good grades, Ofqual has warned.
Teachers in some of England's secondary schools were guilty of ''significantly'' over-marking pupils' GCSE English work this summer in order to boost results, according to chief regulator Glenys Stacey.
Around 600 pupils in Hampshire and 136 in Southampton were left with lower English grades because of the fiasco, despite doing at least as well as others who took tests early.
Southampton education bosses have joined others across the country to launch legal action against Ofqual and two exam boards over the fiasco.
But in a new report into the saga Ms Stacey said that it is hard for teachers to maintain their integrity, when they believe that others are abusing the system.
She laid blame for the debacle on intense pressure on schools to reach certain targets, which led to over-marking, as well as poorly designed exams and too much of an emphasis on work marked by teachers.
''We have been shocked by what we have found. Children have been let down. That won't do,'' Ms Stacey said.
''It's clear that children are increasingly spending too much time jumping through hoops rather than learning the real skills they need in life. That won't do.
''Teachers feel under enormous pressure in English, more than in any other subject, and we have seen that too often, this is pushing them to the limit. That won't do either.''
Headteachers have said that tens of thousands of teenagers received lower GCSE English grades than expected this year after exam boards moved the grade boundaries between January and June.
An initial report by Ofqual concluded that some of January's assessments were ''graded generously'' but the June boundaries were properly set and candidates' work properly graded.
The regulator today published its second report, looking at the reasons behind the changes in results.
The new English GCSEs, which were awarded for the first time this year, were split up into modules, with pupils sitting written exam papers and ''controlled assessment'' - coursework completed under strict classroom supervision.
It was down to schools to decide when pupils submitted their controlled assessment work and sat the exams.
Ofqual's report found that many schools used the marks pupils received in their first exams and the January grade boundaries to work out what score a pupil would need in their controlled assessment and marked it accordingly.
The majority of controlled assessment work was submitted in the summer, and examiners saw evidence of over-marking.
As a result, grade boundaries were raised to take account of this, and led to some students getting lower grades than expected.
Ms Stacey said the distribution of this year's GCSE English results, which saw bunching around the C grade boundary, was ''shocking''.
''The unexpected pattern, the unprecedented clustering around perceived grade boundaries for each of the whole qualification is striking.''
She said this was ''not simply aspirational marking'' by paper or unit but a ''targeted approach to the whole GCSE'', she said.
''It is very hard for teachers to maintain their own integrity when they believe there is widespread loss of integrity elsewhere,'' Ms Stacey said.
Ofqual had spoken to teachers who said they believed that ''teachers elsewhere were abusing the system'', she added.
''No teacher should be forced to choose between their principles on the one hand and their students, their school and their career on the other.''
Under the current system, schools are judged on the number of pupils who score at least five C grades at GCSE, including English and maths.
This measure is included in league tables, with schools expected to have at least 40% of students reaching this standard.
Those which do not, and fall short on other pupil progress measures, are considered failing.
The report says the new qualifications ''reinforced the trend'' of schools running the GCSE schools years (Years 10 and 11) as a ''tactical operation to secure certain grades and combinations of grades''.
''This has come to be seen as 'what good schools do' despite the awareness of many teachers and parents that the concept of broad and deep learning can get lost along the way.''
Ms Stacey said their investigation had told them there were ''special pressures on this subject and the fact that this GCSE is designed in such a way that it is susceptible to these pressures''.
Other subjects do not carry the same pressures as this ''one key central measure, C grade English''.
Mr Stacey later added that it was ''appalling really for students to be wrapped up in anything like this''.
From September next year, English GCSEs will no longer be modular in England, she said.
Any exams or work submitted next January will be marked, but not graded until after June's exam season.
Moderation of the exams will also be tightened, she said, and exam boards will have to improve their communication with schools.
Ofqual will also talk to the Government about the findings as it is due to look into accountability, she said.
It will also advise on exam reform, Ofqual said, warning that care must be taken when introducing new exams such as the Government's new English Baccalaureate Certificate, which are set to replace GCSEs.
Asked about the effect on future qualifications, Ms Stacey said it was ''early days'' and it was not known yet what a new course would look like.
''Choices would have to be made,'' she said.
''If pressures stay as they are, qualifications will need to be locked down.''
This would most likely mean more written exams and less controlled assessment, as well as different systems for marking.
It has been estimated by the Association of School and College Leaders (ASCL) that hundreds of schools saw a large fall in the numbers of pupils scoring at least a C in GCSE English this year.
ASCL deputy general secretary Malcolm Trobe, said blaming teachers and schools was ''outrageous'' and questioned the impartiality of Ofqual conducting an investigation ''into its own conduct.''
Christine Blower, general secretary of the National Union of Teachers (NUT), accused Ofqual of ''shifting blame''.