Children in care in England and Wales who have been in trouble with the law are being failed by youth offending teams, says an inspection report.
The Inspectorate of Probation raised concerns about children placed far from home, and some youth offending team staff who thought little about the emotional impact of being in care.
Its report looked at 60 children, from about 3,000 supervised by the teams.
The Department for Education said plans were being developed to improve care.
The inspectorate, along with education watchdogs Ofsted and Estyn - which inspects standards in education and training in Wales - examined the cases of 60 children who required supervision in order to stop them from committing crimes.
It found about a third of children were placed more than 100 miles away from home, and nearly two-thirds were placed 50 miles away.
Chief inspector of probation Liz Calderbank said: "Why is it so necessary to place so many of these children away from their home?"
She told BBC Radio 4's Today programme: "What we don't do is underestimate the difficulties of dealing with these children and young people, they are some of the most difficult and most damaged within the system.
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"Some of them do need to be placed away from home for their own safety, and some need specialist care as well, and that may be only available in certain locations.
"But from the sample that we looked at of 60 cases, in half of them we saw youth offending teams working very actively to maintain contact with their local families, local environment, so that raises the questions of whether the placement was in the child's best interests."
Regulations required local authorities to allow a child to live near their home, as far as reasonably practicable, the report said.
Distressing casesIn one example, a 16-year-old boy had been moved 31 times since coming into care at the age of three, including one placement which lasted less than 24 hours.
Inspectors said one of the "most disappointing" findings was that some youth offending staff gave little thought to the emotional impact on children of being in care and what was needed to address their problems.
Basic checks were not made when placing these "vulnerable and potentially dangerous" children into homes, the report said, adding that examples had been found of sex attackers being placed with abuse victims.
End Quote Spokesman Department for EducationIt is essential that local authorities provide the vital support [children] need to keep them safe and well and to encourage their potential"
Youth offending teams and and other agencies did not "always work effectively together in the best interests of the children", and poor planning and assessment meant insufficient protection for two-thirds of the children.
A fifth of the children had themselves been a victim of crime while under supervision of the youth offending team, and just over half the children inspected had offended within the care environment.
"What we saw in this inspection really shocked us," said Ms Calderbank. "We came across one girl who had 27 workers, and these were just the ones she could remember. All of of these things are impacting on their life chances - what we are seeing for these children are very poor outcomes.
"Many of them are growing up and then we fear drifting into the prison service or the mental health system."
'Corporate parents'Youth offending team workers' aspirations for the children were "depressingly low", she said. The report said many staff had become "desensitised" and were "under-qualified".
A Department for Education spokesman said it was "completely unacceptable" that some local authorities and homes were failing children.
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The director of the Prison Reform Trust, Juliet Lyon: "There is a well-trodden path from care into custody"
"Children placed far from their homes are extremely vulnerable. It is essential that local authorities responsible for them provide the vital support they need to keep them safe and well and to encourage their potential," he said.
"Three expert groups are currently developing proposals to improve the care provided by children's homes. They are due to report back shortly and we will respond on the action we intend to take in the New Year."
John Merry, vice-chair of the Local Government Association's Children and Young People Board, said the welfare of local children was councils' "paramount concern", and "as corporate parents we are determined to take responsibility to improve the parts of the care system within our control".
He added: "While nearly half of all children in residential homes are placed outside their home area, there may be very good reasons for doing so. This could be for their own safety, to break gang affiliation or to access specialist services.
"What is clear is that where children are placed out of area there needs to be better communication between all the agencies involved to make sure they receive the care and support they need."
Juliet Lyon, director of the Prison Reform Trust, said it was not "altogether surprising that children in the circumstances that the inspectors are describing end up getting into more and more trouble, and quite possibly end up in the prison system.
"They are very often moved from one place to another, further and further from their homes. They very rarely have anybody who stays as a kind of consistent adult throughout their time in care."
Asked whether the problems were related to a lack of funding, Ms Lyon said: "I think it's lack of thought actually, and it's lack of leadership by government, both national and local government.
"This could be put right. We are not talking about vast numbers of children - we are talking about the most vulnerable children."
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