Failings in patient care at Stafford Hospital were a "fundamental breach" of the core values of the NHS, Health Secretary Andy Burnham has said.
He said an independent report into the Mid Staffordshire NHS Foundation Trust, which runs the hospital, delivered a "damning verdict on a dysfunctional organisation".
Mr Burnham said the Government accepted all 18 recommendations from the inquiry's chairman, Robert Francis QC, after he heard evidence from more than 900 patients and families.
He told MPs he would consult on a new system of accreditation for senior NHS managers and ask Monitor, the independent regulator of NHS foundation trusts, to consider "de-authorising" the Mid Staffordshire trust.
The Government is looking at ways to prevent failing NHS managers getting jobs in other trusts, he said, and he called on foundation trust boards to hold meetings in public.
Mr Burnham was speaking after the publication of the report into the failings at Stafford. The probe was launched after another report last March from the Healthcare Commission revealed a catalogue of failings at the trust, which also runs Cannock Chase Hospital.
Appalling standards of care put many patients at risk, and between 400 and 1,200 more people died than would have been expected in a three-year period from 2005 to 2008, the commission found.
In his Commons statement Mr Burnham said: "There can no longer be any excuse for denying the enormity of what has occurred. The care provided was totally unacceptable and a fundamental breach of the values of the NHS."
He added: "This report delivers a damning verdict on a dysfunctional organisation. It was principally a local failure but I accept there are national lessons to learn."
Shadow health secretary Andrew Lansley said the report had set out "in the most compelling and indeed horrific character many of the sufferings of those patients and their relatives".
Mr Burnham said the trust had lost sight of its "fundamental responsibility to provide safe care".
He said: "This dysfunctionality extended to the way they managed targets in the trust and the failure to put in place adequate staffing levels to provide safe patient care."
These levels were "dangerously low" and at one point accident and emergency was being staffed by one third the number of nurses required.
He went on: "Since March last year the Government's first priority has been to help the trust take immediate steps to improve patient safety, care standards and public confidence.
"Last July a new chair and chief executive were appointed and, with a new board and senior team, they are making progress.
"However, as their local hospital hits the news again today, I appreciate the doubts about safety that will be in the minds of the people of Stafford."
He said the Care Quality Commission's (CQC) latest assessment of the trust was that it was "safe to provide services, although it still needs further improvements". No other hospital in England had problems on the scale of Stafford, the CQC believed.
Mr Burnham defended his decision not to hold a full public inquiry, saying a "lengthy adversarial inquiry" would not "be in the best interests of healthcare in Staffordshire".
Turning to one of the recommendations in the report Mr Burnham said it is a "long-standing anomaly" that the "robust" regulatory system for clinicians is not matched for senior managers and directors.
He told MPs: "We must end the situation where a senior NHS manager who has failed in one job can simply move to another elsewhere. This is not acceptable to the public."
Mr Burnham said there would be a further inquiry chaired by Mr Francis to look at how failing hospitals could be identified in the future.
He said overall, the NHS nationally provides a "good standard" of care and the vast majority of patients are satisfied. But he added: "However, where things go wrong, we must face up to them and do everything in our power to ensure that these events can never happen again."
Both the Tories and Liberal Democrats renewed their calls for a full public inquiry, but Mr Burnham said the second inquiry he was setting up would meet those demands.
Mr Lansley said: "None of these reports - and this is now the fourth - have diminished the need for a public inquiry under the Inquiries Act where evidence can be taken in public and under oath.
"We cannot combat a culture of secrecy and bullying other than by the fullest openness and transparency in the investigation.
"We find no fault with Robert Francis's work. We do object to ministers setting up report after report, with constrained terms of reference, designed more to focus on local management rather than to get to the full truth and the full context of the tragedy at Stafford Hospital."
Mr Lansley blamed "top-down political targets" for "distorting clinical priorities" at the trust and called for them to be abolished.
Mr Burnham told him: "I don't think it's possible to read the report and conclude that it doesn't tell the full truth and the whole picture about what happened."
He said the report met the requirement for a "thorough" investigation and the draft terms of reference for the new inquiry included a presumption that it would be held in public.
"We have faced up to the enormity of what happened at Mid Staffordshire NHS Foundation Trust. We have laid it bare today in a very detailed report. I can assure you I take my responsibilities to act on the findings of this report with great seriousness and that is precisely what I will do."