Child protection officers will now face unannounced inspections.
Three senior staff at Haringey Council have been suspended after a critical report into the authority's handling of the Baby P case.
The abused 17-month-old boy died, despite receiving 60 visits from welfare professionals.
The suspended staff include Haringey's head of children's services Sharon Shoesmith. The council's leader and another councillor have also resigned.
Children's Secretary Ed Balls said he had directed that Ms Shoesmith be removed with immediate effect. He does not have the power to sack her.
He has ordered every council in England to review its child protection policies.
Mr Balls said the report into the Baby P, who was on the Child Protection Register, was "damning".
The boy's mother has pleaded guilty and her boyfriend and a lodger have been convicted of charges relating to his death. They are awaiting sentence.
Ofsted, who compiled the report together with other independent agencies, called for changes to the system of investigating the most serious incidents of abuse.
They believe about a third of case reviews carried out after a child dies or is badly injured are inadequate.
Haringey Council confirmed that as well as Ms Shoesmith, Cecilia Hitchen, deputy director of children and families, and Clive Preece, head of children in need and safeguarding services, had been suspended on full pay.
Council leader George Meehan and the councillor supervising the authority's children's services department, Liz Santry, have quit.
The positions of three other staff - Gillie Christou, Maria Ward and Sylvia Henry – are subject to review and they are not undertaking child protection duties pending further investigation, the council said.
Mr Balls said the report delivered a "damning verdict on the current management of safeguarding children in Haringey".
One of the factors that was most troubling, Mr Balls added, was the "failure to talk directly to children at risk".
The key failings highlighted include:
- Agencies acting in isolation from one another without effective co-ordination
- Poor gathering, recording and sharing of information
- Insufficient supervision by senior management
Action to be taken includes:
- A new serious case review to be undertaken into the death of Baby P, with an executive summary to be published by the end of March
- Watchdog Ofsted to carry out unannounced annual inspections of children's services across the country
- More action to be taken at those authorities in England which have had "inadequate" serious case reviews, to see if they have made improvements.
Mr Balls announced new leadership would be introduced in Haringey's social services, with Hampshire County Council's John Coughlan immediately replacing Ms Shoesmith.
Mr Meehan said: "The reasons for my resignation are matters of personal honour and local responsibility."
Ms Santry said: "I am the accountable lead member and I accept that accountability and take my full share of responsibility."
Councillor Lorna Reith, deputy leader of Haringey Council, said the change in leadership was necessary and it showed how seriously the council was taking the report's recommendations.
Mr Balls ordered the investigation two weeks ago, after saying it was clear mistakes had been made and that those responsible would be held accountable.
The inspectors have been examining why the toddler was not taken into care despite numerous injuries including broken ribs and eventually a broken back.