Many supply staff "perform daily miracles" - researcher
The number of "occasional teachers" - on contracts of a month or less - has gone up from 12,200 in 1995 to 19,000, according to official statistics.
They made up one quarter of the extra 8,000 teachers in schools during the past year.
The institute says this is the biggest aspect of education privatisation.
Short-term problems
The difficulty in getting teachers to fill vacant full-time posts means schools are increasingly using supply teachers on long-term contracts.
The report tends to confirm a trend towards experienced teachers' giving up the burdens of a full-time job to do supply work.
It offered more flexibility, better working conditions and better pay.
This is despite research showing that supply teachers often are not given information about the school they are in - such as what times the bell rings at, never mind where resources are - and are made to feel unwelcome by children, school administrators, teachers and parents.
Cost to schools
The Department for Education's Value for Money Unit estimates that schools typically spend £43 a year per pupil on supply teachers - £50.78 for primary schools and £32.80 for secondary schools.
Separate official figures show that the amounts spent each year on all books and equipment are £103.50 in primary schools and £132 in secondaries.
One recruitment analyst estimates schools are now spending more than £600m annually on supply teachers - 5.3% of all spending on teachers.
"Although supply teachers are used across the globe, the rapid growth of the supply agency sector is an English phenomenon," the report says.
Policy issues
This raises significant policy issues for ministers, say the authors, Dara Barlin and Joe Hallgarten.
Mr Hallgarten said it was a classic example of education policies, economic circumstances and changes in society having an unintended result.
"Many supply teachers are performing daily miracles in continuing the learning process for the children who need it the most," he said.
"However, many are poorly prepared, utilised and managed. The use of supply teachers seems here to stay and well-researched, progressive policies, are necessary to take account of this change."
Dara Barlin said that without changes in policy, supply teaching would continue to provide a better alternative for many teachers.
"This will most likely exacerbate shortages in the permanent teaching sector, and might significantly compromise the education our children are getting."
Report's recommendations:
Conditions and checks
"Whilst the best supply agencies offer flexibility and higher rates of pay, others exploit teachers.
Although teacher shortages had driven up the pay supply teachers could command, the rates paid could be very low - in one case a school was paying £130 a day to an agency which was paying the teacher only £62.
"Most concerning is evidence that arrangements for police checks are slack. Some agencies allow teachers to start before these are completed, or ask teachers to pay for their own police checks."
Mr Smith said the problem was that the mechanisms set up to do such checks were unwieldy and were tailored towards permanent staff.
'Important role'
"I think the Department for Education has to come off the fence and say that supply teachers are a fact of life and it's not enough that they operate by a code, they should be properly regulated.
"There are too many instances of children having been abused for this to be ignored."
A spokeswoman for the department said: "Supply teachers play an important role in the smooth running of schools.
"The government is determined to raise standards and the status of the profession as a whole, whilst addressing the specific needs of supply teachers.
"We have sought new ways to do so, such as the introduction of a Quality Mark for supply teacher agencies from early next year."