It follows a recent inspection of the setting, based in Crouch End in North London, one of nine nurseries owned by Active Learning, in which Ofsted judged it to be inadequate.
The inspection was triggered by an incident in which a child went home with the ‘wrong adult’.
The inspection report highlights a number of serious failings including - not ensuring that risk assessment procedures are rigorous in identifying and addressing all potential hazards, as well as not always following good hygiene procedures.
The report states that on the day of inspection, risk assessments were not carried out for the outdoor play area prior to children going outside, which led to an external gate being left unsecured.
It also describes how children’s place mats are cleaned in the sink in the bathroom used for soil and waste products, which it says compromises children’s health and well-being.
The report goes on to say that staff do not organise the period after lunchtime and rest time effectively.
It states, ‘They (staff) tell children who are not sleeping to be quiet and there is not enough planned to keep them occupied if they do not want to sleep.
‘Children who are meant to be sleeping but show signs that they are restless are told they must lie on the bed whether they want to or not. Staff do not meet children’s individual needs during this time.'
The 88-place nursery has now been issued with a Welfare Requirements Notice by Ofsted, setting out actions that must be taken and by what date.
If the nursery fails to carry out the actions then it may be prosecuted by Ofsted and/or have its registration cancelled.
The setting will also receive a monitoring visit by Ofsted to check that improvements have been made to its practice.
If the inspectorate agrees that the action the nursery has taken is sufficient, another inspection will take place within six months of the original inspection.
A spokesperson for Active Learning said, ‘A child was wrongly collected from the Crouch End nursery by a person who was the grandmother of another child at the nursery, but well known to the nursery staff.
'We became aware of the incident within minutes and the child was quickly reunited with its parent.
'As a leading nursery provider, which operates nine accredited settings across London and Surrey, the welfare and safety of children in our care is of the utmost importance. We therefore carried out a full internal investigation to ensure that such an occurrence could not happen again.
'As part of our mandatory obligations, we also reported the incident to Ofsted which subsequently undertook an interim inspection of the nursery.
'We have responded effectively to the visit by implementing its recommendations and now await confirmation of a follow-up inspection.'