Of 79 free schools opened under the Coalition, 30 per cent have been judged by the education watchdog as inadequate or requiring improvement compared with 20 per cent of state schools.
The Government has spent more than £50million setting up the schools, which are free of local council control.
A further £1 million was spent on free school projects that have never opened.
Ofsted said primary pupils do better at core subjects in state-run schools and academies.
In these, 79 per cent of primary pupils got to Level 4 or above for the three Rs compared with 70 per cent of free school pupils. Ofsted figures also showed that between 2012-14 the number passing the Level 4 test rose by 4 per cent in state schools but fell by 13 per cent in free schools.
Shadow Education Secretary Tristram Hunt, said Labour would end the free schools programme.
He said: "David Cameron's free school programme is damaging school standards and wasting public money.
"One third have employed unqualified teachers, too many are failing their Ofsted inspections and a complete lack of local oversight is allowing under performance in these schools to go unchecked for far too long.
"We will deliver a tough new system of local oversight for all state schools, with new Directors of School Standards in all areas of the country, rooting out falling standards and challenging underperformance."