The government commissioned the report last September after a leaked list identified 15 BNP members as teachers.
Review author Maurice Smith added his recommendation should be reviewed every year, which ministers have accepted.
The BNP has not yet commented on the review's findings. Members are barred from the police and prison service.
Mr Smith, a former chief inspector of schools, said a ban would be "taking a very large sledgehammer to crack a minuscule nut".
Schools Secretary Ed Balls welcomed the report, saying the case for a ban would be kept "under active consideration and reviewed on an annual basis".
The schools secretary has now asked for a further review of the measures in place in independent schools to prevent the promotion of racism.
Legitimate organisation
Mr Smith said: "I do not believe that barring teachers or other members of the wider school workforce from membership of legitimate organisations which may promote racism is necessary at present."
Such a move would be a "profound political act", he said, and there was no consensus on the issue.
He said existing measures to protect children and young people from discrimination or political indoctrination were comprehensive enough to mitigate the risk, although some could be improved upon.
Mr Smith said there was currently "insufficient evidence of risk" to justify a ban on teachers joining organisations such as the BNP.
He said: "Although police and prison officers are banned, to ban more than half a million teachers - or six million public servants - from joining a legitimate organisation would take this to a different scale of magnitude."
He also said any ban was likely to have been challenged in the courts by the BNP.
Concern has been raised about independent schools staffed by unqualified teachers. Mr Smith said there were no details on how many staff in independent schools were unqualified.
Mr Balls said he wanted to know if the current situation struck "the right balance between allowing independent schools autonomy, operating in accordance with their ethos and values, and protecting the young people attending those schools from teachers displaying racist or intolerant views or behaviours that could be harmful".
He said there was "no place for racism in our schools" but that the report made it clear that incidences of teachers promoting racism were "extremely rare".
Mr Balls said last year he wanted this review to see if there were sufficient powers available "to keep racism and BNP activity out of schools".
British National Party leader Nick Griffin said at the time his members were victims of "political oppression".
Racist remarks
The NASUWT union, which has campaigned to have BNP members banned from schools, said it was disappointed by the review's findings.
General secretary Chris Keates said: "Maurice Smith has squandered a golden opportunity to advance the cause of ensuring good race relations in schools.
"The report is woefully inadequate and littered with contradictions."
She said too much attention was paid to the number of incidents in schools, saying "one incident is one too many".
Only six incidences of BNP membership by members of the teaching profession or governors were brought to the attention of the Department for Children, Schools and Families in six years, the report said.
It also found only nine incidents where teachers making racist remarks or holding racist materials had been referred to the General Teaching Council for England.
"The idea that a person who signs up to membership of the BNP can simply leave these beliefs at the school gate and behave as a 'professional' when they walk into school is risible, " said Ms Keates.
But the Association of School and College Leaders welcomed the findings.
Its general secretary Dr John Dunford said: "Of course people with racist views should not be working with young people in schools. However, it is much less clear that there should be a blanket regulation on the issue.
"The aim should be genuinely to challenge young people to think for themselves and to form their own opinions rather than to promote a particular ideology."
The review into independent schools will report in September.
BBC News
