A high-performing Christian school in Sunderland has been placed in special measures by an Ofsted team in what its principal says is a "huge shock".

Chris Gray blamed the negative report on regulations about "British values".

Grindon Hall Christian School's GCSE results make it the best-performing secondary state-funded school in Sunderland. However, inspectors have downgraded it to "inadequate" from last year's ranking of "requires improvement".

The move follows an inspection in November about which Gray wrote a formal letter of complaint, saying that "the tenor of the inspection was negative and hostile at every stage, as if the data collected had to fit a pre-determined outcome". He complained about inappropriate, upsetting and instrusive questions asked of the children including questions about homosexuality, and included evidence from sixth formers who said that they felt the inspectors had set out to target the school's Christian ethos.

Gray also noted that he had been told by one of the inspectors that the inspection had been personally authorised by the Secretary of State for Education, Nicky Morgan, because of Grindon Hall's "links with another school". Gray said: "I was never told which school, what the link was or the relevance of any link."

However, the resulting Ofsted report says that "Grindon Hall provides the financial services of their Bursar for one day a week to Durham Free School". Morgan has announced that Durham Free School will be closed following an unsatisfactory Ofsted report, though the school is challenging the decision.

The Ofsted report says there are weaknesses in the school's safeguarding and recruitment policies and that "The curriculum does not adequately prepare pupils for life in modern Britain." It adds that "Pupils show a lack of respect and tolerance towards those who belong to different faiths, cultures or communities." It also says prejudice-based bullying is not tackled effectively and that "Discrimination through racist or homophobic language persists." It says teachers do not have high enough expectations of students and that behaviour requires improvement.

In a statement after the Ofsted report was released Gray said: "Anyone who places our May 2014 Ofsted report alongside the January 2015 report would think they were talking about two different schools. There have been no major changes of staffing, pupils or policy to account for the difference. The difference was the introduction of the widely discredited "British Values" rules and the aggressive attitude of the inspection team."

He criticised the inspectors for implying that non-Christian festivals should be celebrated, saying: "The questioning by inspectors makes clear that their idea of a balanced curriculum is for us to force pupils to celebrate non-Christian religious festivals. This would breach our Christian foundation which stipulates that we are a Christian school. It would certainly offend against the consciences of many of our staff, pupils and parents. No one should be told by a government official to celebrate any religion. Learn about it, yes. Celebrate its festivals, no."