The bombshell report has been published by Professor Alexis Jay (Image: PA)

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Hundreds of children who were sexually abused by paedophiles working in the care system were “pawns in a toxic power game” between politicians, an inquiry has found.

A report published today said youngsters in the care of Lambeth council in south London were subjected to levels of cruelty and sexual abuse that are “hard to comprehend”.

The Independent Inquiry into Child Sexual Abuse (IICSA), which is examining historical abuse across different institutions and organisations, said only one senior employee was disciplined despite 177 suspects being accused of sexual abuse at the Shirley Oaks home in Croydon.

Professor Alexis Jay OBE, chair of the inquiry, said “bullying, intimidation, racism, nepotism and sexism” thrived within the Labour council for many years, against a backdrop of corruption and financial mismanagement.

Professor Jay said: “There was a vicious and regressive culture, for which a succession of leading elected members were mainly responsible, aided and abetted in some instances by self-serving senior officials.

“This all contributed to allowing children in their care to suffer the most horrendous sexual abuse, with just one senior council employee disciplined for their part in it.

“We hope this report and our recommendations will ensure abuse on this scale never happens again.”

Lambeth Council now accepts that it failed children in its care but the report found the true number to be “significantly higher”.

At the Inquiry’s public hearing last year, Annie Hudson, strategic director of children’s services, acknowledged that the council “created and oversaw conditions … where appalling and absolutely shocking and horrendous abuse was perpetrated”.

The report called on police to consider investigating Lambeth council's failure to inform a coroner that a boy found dead in the home in 1977 had alleged he was being abused.

Three further recommendations are for a review of checks for foster carers, mandatory training for councillors on safeguarding children and for Lambeth to produce an action plan in response to the findings.

In total 705 former Lambeth residents have come forward to the council to report being sexually abused while in the care of the borough.

Lambeth has paid out £71.5million in compensation so far and has arranged to borrow £125 million to cover the potential final cost.

The report found there was a “culture of cover‐up” within the council, with staff and councillors failing when it came to responding to extremely serious allegations of misconduct, including criminal behaviour, towards children.

One “particularly shocking example” was Michael John Carroll, who ran the Angell Road children’s home in Brixton and had failed to disclose in the 1970s a previous conviction for child sexual abuse.

He kept his job when this came to light following a disciplinary hearing.

Carroll was also supported by Lambeth Council staff in respect of his applications to foster children.

He was later convicted in 1999 of 34 counts of child sexual abuse, including of two boys in the care of Lambeth between 1980 and 1983.

The report criticised police for failing to properly investigate sexual abuse during Operation Bell in 1992 and Operation Middleton which ended in 2003.

It said: “The Inquiry has identified failures to follow up evidence leads – in particular, the links between perpetrators that may have led to the identification of further offending.”

But it rejected claims of political interference in police investigations saying the “reality” is that some staff and politicians were complicit in putting children at risk of sexual abuse because they “simply did not care enough”.

The report found: “With some exceptions, they treated children in care as if they were worthless. As a consequence, individuals who posed a risk to children were able to infiltrate children’s homes and foster care, with devastating, lifelong consequences for their victims.”

Professor Jay said: “Over several decades children in residential and foster care suffered levels of cruelty and sexual abuse that are hard to comprehend.

“These children became pawns in a toxic power game within Lambeth council and between the Council and central government.”

The findings come after a seven year investigation by the Shirley Oaks Survivors' Association, led by Raymond Stevenson and Lucia Hinton.