A leading Colchester grammar school has been threatened with having its funding agreement withdrawn after Ofsted found that pupils felt “unsafe” in school after being subject to sexist or racist comments.

Colchester Royal Grammar School (CRGS) has received a termination warning notice after inspectors concluded that leaders failed to address a “pervading culture in the school which does not promote equality and respect”.

An Ofsted report, published in July, found that leaders in the school had not ensured that boys understand “how to interact appropriately” with girls, and some male pupils could be rude and make “inappropriate remarks”.

A letter from Sue Baldwin, regional schools commissioner for the East of England and North-East London, first sent to the school on July 9, suggests that the funding agreement of the academy may be terminated.

This could lead to the school being taken over by a multi-academy trust if improvements are not made.

Ms Baldwin said she had “serious concerns that the trust does not have the capacity to make rapid and sustained improvement at the academy”.

Ofsted’s review into safeguarding in schools concluded in June that incidents of sexual harassment and abuse has become “normalised” for schoolchildren.

The watchdog visited 32 schools and colleges and spoke to more than 900 young people about sexual harassment after thousands of testimonials were posted on the website Everyone’s Invited.

An Ofsted inspection of CRGS, carried out in May, found leadership, behaviour and attitudes, and personal development at the school to be “inadequate”.

The report concluded that parts of the school had become a “hostile environment” for some pupils.

At the time, headmaster John Russell said the report was “very difficult to read” and it was a “sad day” for the school.

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Following the publication of the warning notice, a spokesperson for CRGS said: “The inspection triggers lots of additional support and scrutiny.

“Not only will Ofsted visit us more regularly to monitor our progress against key actions, but the school is also issued with what is known as a termination warning notice.

“We appreciate that sounds quite daunting, but it is our understanding that this is something that is issued to every academy that receives an inadequate grade.

“We always knew this letter would arrive within days of the Ofsted judgment being published. The letter does not, as the wording implies, suggest the school will close.

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“It is, however, a legal notice that states that the funding agreement for the school may be transferred to a multi-academy trust if certain conditions are not met as we move forward. We are already working at pace to prepare for all that will be asked of us.

“There continues to be further discussions about what this outcome means for CRGS. We are working with the Department for Education and Regional Schools Commissioner to discuss the increased focus that the school will be under, and how we continue to move forward for our community.”