Amanda Spielman, who co-founded the Ark academy chain, was recommended by Education Secretary Nicky Morgan as her preferred candidate for the role of Her Majesty's Chief Inspector of Education, Children's Services and Skills (HMCI) last month.
But following a pre-appointment hearing last week, the education select committee said it is "unable to support the appointment".
The committee said that, while recognising Spielman's range of experience and contributions to the education sector, it had "significant concerns" about her suitability for the role.
Neil Carmichael MP, chair of the committee, said Spielman failed to demonstrate "the vision and passion we would expect from a prospective HMCI".
"The new HMCI will face the task of leading Ofsted to raise standards and improve the lives of children and young people, and we were unconvinced that Ms Spielman would do this effectively," he said.
"Ms Spielman has experience of secondary education but she did not persuade that she had a clear understanding of the other aspects of the chief inspector's role, including early years, primary education, further education, and children's services.
"Ms Spielman's responses on child protection were particularly troubling and did not inspire confidence that she grasped the importance of Ofsted's inspections in preventing children being held at risk through service failure.
"As a committee, we did not leave the session with the view that Amanda Spielman was prepared for the vast scope and complexity of this important role."
Carmichael said that there is no need for urgency in the process - as Sir Michael Wilshaw's term does not expire until the end of the year.
"With this in mind, we call on the Secretary of State not to proceed with Ms Spielman's appointment," he added.
Education Secretary Nicky Morgan said she was "surprised and disappointed" at the select committee's report.
"Ms Spielman has a proven track record as a leader and huge experience in the education sector having helped found Ark, one of the most successful academy chains in the country and worked as the chair of Ofqual," she said.
"I chose Ms Spielman as my preferred candidate because I believe she will be a highly effective leader who will be unafraid to do the right thing and where necessary challenge schools, local authorities and government where education and social care services are not meeting the standards our children deserve.
"I will now consider their report and respond in due course."
The education select committee has also expressed concern about the lack of expertise on children's services among Ofsted's senior management. It has called for a permanent deputy chief inspector be appointed to oversee the inspection of children's services from the point at which a new chief inspector takes up post.
It has also called for Ofsted's education and social care functions to be split between separate inspectorates in order to afford social care a greater profile.