The inquiry ruled that the Scotland Yard unit was not justified in intruding deeply into the private lives of campaigners, including their sexual relationships, and suggested it should have been disbanded early in its existence.
The inquiry found that the managers of the unit frequently approved reports that contained “many examples” of racism and sexism.
Senior Whitehall officials, some of them in the Cabinet Office, and top police officers knew about the unit, which was part of a highly covert state-funded apparatus that spied on leftwing and progressive groups, the inquiry concluded.
The critical evaluation of the unit, known as the Special Demonstration Squad (SDS), was made public on Monday by David Barr KC, the inquiry’s most senior barrister.
He said the unit’s “operations have caused a lot of harm. Democratic freedoms have been infringed, outrage and pain has been caused.”
The inquiry, led by the former judge Sir John Mitting, is examining how 139 undercover officers spied on more than 1,000 mainly leftwing groups between 1968 and at least 2010. The officers were sent on deployments, usually lasting four years, to infiltrate political groups and acquire information about the activities of campaigners.
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Barr said it was “hard to identify a single instance” in which information gathered by the unit “averted a public order calamity”.
He said the SDS operated with a “remarkable lack of oversight, formal training and instruction” but was not a “rogue unit” as it was funded by the Home Office and collaborated with MI5.