Some secondary school teachers in England were guilty of "significantly" over-marking pupils' GCSE English work this summer in a bid to boost results, the exams watchdog said.
Teenagers had been let down by an exam system that is abused by teachers who are under pressure to achieve good grades, Ofqual warned.
In a new report into the GCSE English fiasco, chief regulator Glenys 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. 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.
ITV News's Libby Weiner reports:
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.
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".