
The University of Oxford report, commissioned by the Department for Children, Schools and Families, said the most effective forms of care for such children were specialist fostering and parenting support.
"Residential treatment and play therapy were not found to be effective," in comparison, it added.
The report, Systematic Reviews of Interventions Following Physical Abuse, said the government should prioritise funding on therapy that is "supported by strong evidence for improving outcomes".
But Janet Rich, children's services development officer at the National Care Association, said the report was "frightening" in terms of its potential influence on funding for therapeutic care.
She said: "This is part of an increasing feeling in government and councils that foster care and family support is best. It is for many children, but not for all. Also, specialist foster care is seen as cheaper than residential care."
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