Mental health campaigners called for extra investment in crisis services yesterday after an inquiry into the killing of a man by a psychiatric patient with a known history of violence said the death might have been avoided with better care.

But they warned that Government proposals for reform of the mental health law, to be published today, would not improve the safety of the public and would divert resources urgently needed to improve services.

The damning report of the inquiry into the killing of Denis Finnegan, 50, by John Barrett, published yesterday, found doctors caring for Barrett, who was suffering from paranoid schizophrenia, were so intent on meeting his wishes that they played down the risk he posed to the public.

The 400-page report catalogues failures at every level and highlights poor communication, insufficient monitoring of his treatment, and misjudgements about the threat he posed.

It carries disturbing echoes of the inquiry into the killing 14 years ago of Jonathan Zito, a 27-year-old musician stabbed to death at a London Tube station by Christopher Clunis, who had recently been released from psychiatric hospital. That report sparked a national outcry, and in the intervening years there have been scores of similar killings, each accompanied by its own inquiry, yet the lessons have not been learnt, campaigners said.

Mr Finnegan was on his morning bicycle ride through Richmond Park on 2 September 2004, when he was set upon by Barrett. He had just returned from a year-long trip round the world after taking redundancy from his job as head of corporate banking at the Royal Bank of Scotland.

Barrett had absconded from Springfield Hospital, where he had been admitted the day before. Unlike Christopher Clunis, he was a "restricted" patient in the care of the forensic service of the South West London and St George's Mental Health Trust because of the danger he posed, and should have been closely monitored.

He had previously stabbed three people in the outpatient department of St George's Hospital in 2002. The day before the killing, he had bought the kitchen knives with which he stabbed Mr Finnegan repeatedly. He was caught within minutes, and later said: "With all my heart, nobody should deserve that. I am glad to have been caught."

He pleaded guilty to manslaughter last March and is now in Broadmoor Hospital serving a life sentence.

The inquiry report, commissioned by the South West London Strategic Health Authority and chaired by a mental health solicitor, Robert Robinson, says that though it was not predictable that Barrett would kill, "the risk of serious violence associated with deterioration in his mental state was known".

It adds: "We conclude that one of the factors that contributed to the killing of Denis Finnegan was that John Barrett's illness was inadequately treated."

It says the remedy for what went wrong "lies not in new laws or policy changes" but in "sound clinical practice and organisational management".

Paul Corry, of the mental health charity Rethink, said: "Everybody knows the mental health services in this country are not what they should be. If you add human error to that, you will get tragedies occurring. The answer is not new legislation which diverts time, effort and resources.

"It is to use the resources to improve the services that we have. If the right crisis services had been available to help [Barrett], this might have been prevented."

Marjorie Wallace, chief executive of the charity Sane, said: "Yet again we have an inquiry that exposes the same lack of communication and supervision, and the failure to protect patients and the public. Sane's own analysis of 69 inquiries into homicides involving a person with a mental disorder found that in half of the cases, mental health professionals ignored the warnings of family and friends, a key factor."

10 years of fatal errors

* Jonathan Zito was stabbed to death by Christopher Clunis on 17 December 1992. An inquiry revealed errors and missed opportunities in the care of Clunis.

* Anthony Kellman, a nightclub bouncer, was shot by paranoid schizophrenic Wayne Hutchinson in December 1994. He was jailed in 1996. A junior locum doctor had granted him home leave from hospital.

* Lin Russell and her daughter Megan, six, were battered to death by Michael Stone, a drug addict with a severe personality disorder, on a lane in Kent in 1996. Josie, Megan's sister, survived the attack. Stone was jailed for life. An inquiry, published last month, identified many failings by the mental health, addiction and prison services.

* Errol Leong, 38, strangled Tammy Little, 36, in Hayle Towans, Cornwall, in 2000. He had been released from custody the day before. An inquiry criticised the trust.

* Michael Martin, 56, was killed by his son Matthew, 25, with a pickaxe in 1999, three months after his son's release from Exeter prison. An inquiry found errors in Matthew's care.

* Brian Dodd, 72, was stabbed to death by Paul Khan in Prestatyn in March 2003. A reportidentified failures in Khan's care. He was jailed for life.