A Bristol primary school was rocked by an incident last summer in which three boys were suspended amid allegations of sexual assault, a report by Ofsted reveals.

But the watchdog says that "all aspects and issues are now resolved" and Cabot Primary in St Paul's has stabilised.

The pupils, who were all under the age of criminal responsibility, were temporarily excluded last July after a boy accused them of abusing him in the school toilets.

After an outcry in the community, the city council said all three would be transferred to other schools. The alleged victim's father removed him from the school.

Ofsted visited Cabot Primary earlier this month and found that the incident had continued to hit parental and staff confidence and the self-esteem of the pupils for several months afterwards.

"Attendance rates for both staff and pupils were severely affected as were the perceptions of the local community to the school," inspector Lorna Brackstone reported.

Head teacher Carmen Cadwgan resigned in November, as did the chair and vice chair of governors.

Ms Brackstone noted that a temporary head, Wendy Marriott, was in place until July along with an acting deputy and two governors as part of a support plan put in place by the city council.

Ofsted went back to Cabot because of issues raised during the last full inspection in January 2008.

A spokesman said that although the school was rated satisfactory overall at that time, there were several areas it was asked to work on and the monitoring visit was focused on those matters but mentioned the incident last summer as part of the context.

Ms Brackstone's letter outlining the steps taken by the school to improve was circulated to the parents of the 177 pupils this week.

She said: "Having considered all the evidence, I am of the opinion that the school is making satisfactory progress in addressing the issues for improvement and in raising the pupils' achievement.

"All staff and governors have taken a strong collaborative approach to school improvement and are working effectively as a team with the aim of accelerating academic progress."

Ms Marriott said: " I'm particularly pleased the inspector noted the teamwork that is going on to speed up pupils' progress – credit should go to pupils, parents and staff who have shown how improved relations can help academic progress."

City council spokeswoman Julia Walton said school staff had had training on how to work effectively with communities and how to develop mentoring, and a workshop had been held to help parents understand the education system.