A Department of Education investigation into the suspension of the former head of the main school on the Scillies has found the Local Council and the School Governors broke the law.
Bryce Wilby was suspended from the Five Islands School in 2012 and later dismssed over claims of financial irregularities.
Mr Wilby denied the allegations.
A report from the department said changes were needed in the way the school was governed.
It warned it would take action if the changes were not made.
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It will be a dry and cold night in the South West, with cloud gradually increasing by Friday morning.
It will be a dry and cold night in the West, with cloud gradually increasing by Friday morning.
The Duke of Edinburgh was not injured in the crash, which took place close to the Sandringham Estate on Thursday, Buckingham Palace said.