The education watchdog carried out a number of unannounced inspections on facilities believed to be operating to their own rules, curriculum and timetables, and found that 15 institutions were unregistered.
One in Birmingham was found in squalid conditions with evidence of separate classrooms for boys and girls.
Ofsted wrote to the Education Secretary Nicky Morgan in July to say there were high numbers of pupils dropping off school registers, and with no record of their onward movements, they could potentially be exposed to extremist ideologies.
Today a letter from Ofsted’s chief inspector Sir Michael Wilshaw, to Nicky Morgan, said that the arrangement for closing down unregistered schools is inadequate and the law around this issue needs tightening as no individual has ever been prosecuted.
Local authorities also need to do more to identify the institutions that are teaching children outside of the proper guidelines and he is calling on the Government to do more.
One room in the Birmingham school was found to contain three matresses covered in dirty sheets, there was no running water in one toilet and pupils were being taught a narrow curriculum that fails to prepare them for modern life in Britain.
Lucy Powell MP, Labour’s Shadow Education Secretary, said: “This is now the second time Ofsted have warned this Government that significant numbers of children, including those who could be at risk of being radicalised, are ending up in unregistered provision, where they could be exposed to extremist ideologies. “
The Education Secretary said the information was concerning but that she welcomed the chance to work with Ofsted, and consider their recommendations.