If you get this error in your logs when trying to set up public key authenticated automatic logins, or while trying to SSH into your account, after setting up the public key the issue is related to permissions.
Tailing /var/log/secure on the target machine will be useful:
tail -f /var/log/secure
Dec 26 12:30:38 server sshd: Authentication refused: bad ownership or modes for directory /home/user/.ssh
As you can see – bad ownership or modes for directory /home/user/.ssh.
SSH doesn’t like it if your home or ~/.ssh directories have group write permissions. Your home directory should be writable only by you, ~/.ssh should be 700, and authorized_keys should be 600 :
chmod g-w /home/user
chmod 700 /home/user/.ssh
chmod 600 /home/user/.ssh/authorized_keys
So fixing permissions is the way to go and have this error resolved.