The King Fahad Academy had books containing controversial views
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Inspectors have said a satisfactory education is provided by a Saudi-funded Islamic school embroiled in a row over texts calling other faiths "worthless".
Ofsted carried out a "no notice" inspection at the King Fahad Academy in London last Thursday, on the orders of education ministers.
The watchdog's report said the textbooks had been "inappropriate" but had now been taken out of use.
The inspectors reported that the school was "open and co-operative".
Lesson plans, store rooms and documentation at the school were examined.
And inspectors randomly interviewed teachers as well as 30 students at the school aged between 13 and 16.
Their report states: "The quality of the education is satisfactory, as at the time of the previous inspection.
"The school meets all the regulations concerning pupils' spiritual, moral, social and cultural education."
Inspectors said pupils at the school had "good knowledge and awareness" of their own and other religions and cultures and showed a "good knowledge of British institutions" and tolerance of others' views.
'Abuse'
The school's director, Dr Sumaya Alyusuf, welcomed the report.
"We are delighted that the academy's name has now been cleared," she said.
"The whole academy community, including students, teachers, staff and parents, has suffered following these allegations.
"A number of students have been verbally abused and we understand that a parent was physically assaulted.
"We have been looking at ways to reassure students of their safety and to further strengthen our links with our community so that the students feel safe and have a sense of belonging."
A spokesman for the Department for Education and Skills said: "It is important that parents and the wider public are assured that all schools provide their pupils with an education that allows them to acquire an appreciation of and respect for their own and other cultures in a way that promotes tolerance and harmony."