A firm which operates three nurseries in Wanstead has closed one branch following a damning Ofsted report which said children's safety was being put at risk due to poor management.
Treehouse Kindergarten, in Grove Hall, Nightingale Lane, was criticised for a series of breaches, including failing to properly secure its premises - which in one case led to a child wandering off.
Ofsted said staff there had failed to ensure that youngsters were properly supervised, that risk assessment was weak, and that teaching was "ineffective".
Inspector Sue Mann said: "the provider does not understand how to keep children safe or her responsibilities for ensuring that the manager and staff are adequately deployed to supervise all children.
"These are breaches of legal requirements and put the children's safety and welfare at risk."
It is believed that the kindergarten closed in the last few weeks, but the Ofsted report has only just been published.
It had been operated by Treehouse Nursery Schools Limited, which also runs nurseries in Woodbine Place and at the Methodist church in Cambridge Park.
Prior to the kindergarten's closure, the company employed more than 100 people, making it one of the biggest employers in Wanstead.
The most recent Ofsted report for its nursery in Woodbine Place, published earlier this year, rated it good and said all safety requirements were being met.
A woman identifying herself as the owner of the firm, who refused to give her name, said the kindergarten branch had closed due to financial difficulties.
She told the Guardian: "I closed it because I lost a lot of money. It had nothing to do with the Ofsted report".
She then said she had not seen the Ofsted report and declined to comment further.
The kindergarten cared for around 30 children of pre-school age, and was first registered in 2010.
The report praised its policy of letting children choose their own snacks and drinks, but was otherwise widely critical.
The kindergarten was issued with a Welfare Requirements Notice to improve following the inspection, which took place in May.
It was rated good in its previous Ofsted report in 2011.
Treehouse Nursery Schools Limited said in a statement: “Following the Ofsted report and the financial loss as a result the company decided to close the Kindergarten two months ago”.