Tower Controller described an unsafe condition when the Developmental working Local Control directed arrival aircraft into a conflict situation; uncorrected by the Instructor and ridiculed by other controllers.

Narrative

Aircraft X was instructed by Local Control to fly over the numbers of Runway XX for a left downwind to Runway YY. Aircraft X turned for the numbers of Runway XX as advised and flew in front of Aircraft Y on an IFR approach to Runway XX. Aircraft Y was at 1;400 FT and less than a mile from aircraft X. The next incident was when Aircraft X was on short final to Runway YY and Air Carrier Z; Lear Jet; was on final to Runway XX and Aircraft X was told to make a left 360. I was the Controller in charge and told Local Control three times that his Trainee had turned Aircraft X head on into Air Carrier Z. I told him three times to instruct Aircraft X to fly runway heading and go around. Local Control did not respond. Aircraft X flew over the top of Air Carrier Z with no distance separation and 300 FT of vertical separation.Ground Control played a contributing factor in this event by ridiculing the Local Controller; laughing and telling the Tower staff that the Local Controller had lost the picture. Ground Controller's actions added to the confusion the Local Controller was already experiencing.