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Keanu Williams died in January 2011 after being found with 37 injuries
Children's services at Birmingham City Council could be taken over by the Department for Education before Christmas if standards do not improve.
The takeover will happen if Ofsted inspectors do not see improvements when they return later this month.
The department is the biggest of its kind in England and has been rated as "inadequate" for four years.
Department head Peter Hay said the city council had to be involved in its running but there were no easy answers.
Earlier this week, Michael Gove signalled a significant shift in direction in the way his government will deal with failing child protection services.
He suggested in a speech that more children's services departments could be taken over - in the same way that Doncaster was earlier this year.
Doncaster was the first and only to be taken completely out of council control and is now managed by a private firm until an independent trust is set up.

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Khyra Ishaq weighed just 2st 9lb (16.5kg) when she was discovered at her home in 2008
There have been a number of high-profile child deaths in Birmingham in recent years, including those of Khyra Ishaq in 2008 and Keanu Williams in 2011.
Listen to The Report, broadcast on BBC Radio 4 on Thursday 14 November at 20:00 GMT
Rebecca Shuttleworth is serving a life sentence for murdering Keanu after he was found with 37 injuries at his home in Ward End, Birmingham in January 2011. A serious case review concluded last month there were "a number of significant missed opportunities" to save the two-year-old.
Khyra died aged seven in 2008 after being starved at her home in the Handsworth area of the city. Her mother, Angela Gordon, 35, and her ex-partner Junaid Abuhamza, 31, were jailed in 2010 for her manslaughter.
'National disgrace'Birmingham children's services has been rated as inadequate by Ofsted since 2009.
Mr Hay, who took over as head of the department in July, said shortly after starting that improvements had not been made and he could not guarantee the safety of children in the city.
Key dates in 'failing' social services
- May 2008: Khyra Ishaq, seven, dies after months of abuse by her mother and her mother's ex-partner
- Feb 2009: City council served with improvement notice by the government for its services to safeguard children
- Feb 2010: High Court judge rules Khyra "might still be alive if she had not been failed by social services"
- July 2010: Serious case review says Birmingham social services is still failing to protect vulnerable children
- Oct 2012: Surprise Ofsted inspection shows council's child protection services are "inadequate"
- Feb 2013: Report reveals 431 children's services staff at the council were on long-term sick leave in 2012
- Oct 2013: Serious case review finds opportunities were missed to save two-year-old Keanu Williams, who was beaten to death by his mother
- Oct 2013: Ofsted boss Sir Michael Wilshaw singles out city for criticism for 23 serious case reviews over the past seven years
- Nov 2013: Council says children's services budget to be protected despite having to make cuts of £600m from its budget over six years
- Nov 2013: BBC learns council could be taken over this month if standards do not improve
Last month Ofsted chief inspector Sir Michael Wilshaw said the city's failure to protect vulnerable children was a "national disgrace".
A spokesman for the DfE said it had warned the council that unless Ofsted identified signs of improvement in its next inspection in the coming weeks it would have to take further action.
Speaking to BBC Radio 4's Today programme, Mr Hay said the department was "very clear that performance is inadequate" and it had been trying to establish a greater transparency so it could "get governance right of how we improve services".
He said there should be a role for the city council because it could "bring the relationships and the money and the investment".
"But it can't do what it's always done and I absolutely respect that the secretary of state has a very difficult decision," he said.
The key was having "enough social workers to do great social work" but his department currently had vacancy rates for qualified staff of more than a quarter and experienced supervisors of more than a third, he added.
"I've heard people thinking about jobs say that they've been told not to come to Birmingham because it's a blot on their CV. I think that's unacceptable," Mr Hay said.
He said social care involved many "risky decisions" and "fine calls".
"We sometimes expect people to have had a crystal ball. All I'm expecting them to have done is to have made a judgement - an analysis of the information - and to live with that risk," he added.
Khalid Mahmood, Labour MP for Birmingham's Perry Barr constituency, said the takeover warning was a "complete and utter political move" by the government.
Analysis
Michael Buchanan Social Affairs Correspondent, BBC News
The moment of reckoning for Birmingham is near. There has been a clamour for years from some campaigners for Whitehall to do something, but that is far easier said than done.
Earlier this year, Mr Gove announced he was to create an independent trust to run Doncaster's equally-troubled child protection services. But the model has now been watered down amid concerns about accountability and potential legal challenges.
Birmingham is far, far larger and there simply isn't a ready-made solution out there. It would be a brave private company that would approve running services in a city with nearly 2000 children in care and 300,000 young people living here.
Anything can happen at any time. And any contract would need to have a lot of zeros at the end of it, which is money the government probably doesn't have. So while the problems are clear, the solution is anything but.
"If they are going to do it they should just do it instead of making leaks and threats," he told BBC Radio 5 live.
He said the government could instead look at devolving the department to constituency level, as there were some constituencies with more than 100,000 people.
With a population of 1.1 million, Birmingham is the most populated British city outside London.
Former Tory MP Tim Loughton said he had visited Birmingham more times than any other authority when he was children's minister and the major problem was "the city was in denial about the extent of the problem".
He said Birmingham had to contend with challenges such as its size and its ethnic diversity, as well the the lack of consistent leadership with four leaders in as many years.
Sue White, a professor of social work at Birmingham University, said the city would "not get better simply by being shamed by Ofsted inspections".
"In my view that process has made the patient sicker. The medicine is killing the patient," she said.
In 2010, Birmingham was ranked 13th in a government list of deprived areas, behind authorities such as Hackney and Tower Hamlets in London.
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