Some secondary school teachers were guilty of "significantly" over-marking pupils' GCSE English work in a bid to boost results, Ofqual said.
The GCSE exam for children in England is to be replaced by an English Baccalaureate Certificate with the first courses to begin in 2015.
Education Secretary Michael Gove is to unveil details of a major overhaul of GCSE exams marking a return in part to the old O-level system.
Christine Blower, general secretary of the National Union of Teachers (NUT), has accused Ofqual of "shifting blame" in a report which suggests pupils have been let down by the exams system.
Ofqual's report into GCSE English exams 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.
Ofqual chief regulator Glenys Stacey said the distribution of this year's GCSE English results, which saw bunching around the C grade boundary, was "shocking".
Ofqual chief regulator Glenys Stacey has said "children have been let down" by school exam systems and that she was "shocked" by the findings of the report.
– Ofqual chief regulator Glenys Stacey
We have been shocked by what we have found. Children have been let down. That won't do.
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.
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.
In a new report into the GCSE English fiasco, 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.
ITV's Paul Davies has visited a school in Cambridge, where pupils and staff are concerned about the implications of the switch from GCSEs to the English Baccalaureate Certificate.
The government's view is that the GCSE exam reform will bring much needed rigour to a system where standards have been slipping for years, reports Tom Bradby.
Christine Blower, general secretary of the National Union of Teachers (NUT) has commented on Michael Gove's plans to replace GCSEs with the English Baccalaureate Certificate.
Michael Gove has reformed the school exam system - but not in the way he initially intended.
There was a big row inside government between the Conservatives and the Liberal Democrats and what we've ended up with is a compromise - critics might say a fudge.
What are people who are sitting GCSEs over the coming years supposed to think when their exam is being downgraded?
However, it's worth pointing out that there are some radical changes about this.
A lot of people in education would say that they get incredibly frustrated with the current system, they feel that having multiple exam boards inevitably leads to a race.
So there are some significant changes today, and Mr Gove would certainly like us to focus on that.
Alun Cairns, MP for the Vale of Glamorgan, is concerned that if the Welsh Government don't change their stance on GCSEs in Wales, Welsh students could be left behind.
Nick Clegg has said he "wholeheartedly" supports Michael Gove's plans to replace GCSEs with the English Baccalaureate Certificate.
Speaking during a visit to Burlington Danes Academy school in White City, west London, he said:
– Nick Clegg, deputy prime minister
There are many people who think that if you want to make the system more rigorous, you have to leave some behind, but I disagree.
"I think you can have greater rigour in the exam system, that's a good thing, but also ensure we can cater for all children, the same way the present exam does.
Michael Gove and I have worked closely on this, we are both committed equally to greater rigour in the exam system, yet being inclusive and supportive within the system.
I wholeheartedly support this, I think this is a really good reform.