The head of Marlborough Road Primary School in Salford, Judith Elderkin, said teachers warned her that Rita Mehra made the threat after she announced the visit by Ofsted.
Mrs Mehra, 49, from Burnage, was dismissed last year for a "breakdown of trust and confidence".
She is claiming unfair dismissal and racial discrimination against the school, Salford city council and senior teaching staff.
Mrs Elderkin said she was told of the threat in January last year. She said: "One of her colleagues, Rob Dean, came to tell me he was concerned that Mrs Mehra had been making a threatening statement about what she would do when Ofsted came to inspect the school. He said she had threatened to teach badly.
"Mr Dean had previously worked at a school which had gone into special measures and he knew how traumatic and difficult it could be for staff and pupils. He was also aware of an instance in another local education authority where staff had deliberately taken action to get the school to fail an inspection.
"I became very concerned for the school and the staff as it can be very serious if staff do not stick together and work in a harmonious way."
Mrs Elderkin said that in January 2003 there had been a "nasty disagreement" between Mrs Mehra and a class assistant called Nazlin Pinder.
Six months later, Mrs Elderkin said, she walked into a "very loud and heated" argument between Mrs Mehra and Mr Dean. She gave Mrs Mehra a second warning letter about her behaviour.
Mrs Elderkin denied she and her deputy David Fox went into classrooms and asked children if they liked Mrs Mehra but she added: "Her temper tantrums and shouting I did have an issue with."
Proceeding