A shocking catalogue of physical ill-treatment and sexual abuse is revealed today by an inquiry into the care of people with learning disabilities at a hospital and homes in south London.

One woman was raped by a member of staff, others were sexually assaulted and there were repeated incidents of violence between residents of the homes run by Sutton and Merton Primary Care Trust. One male staff member was observed to have slapped, kicked and punched residents over a period of at least four years.

An inquiry by the Healthcare Commission, the NHS watchdog, found "institutional abuse" on a grand scale. Residents were strapped into wheelchairs, offered little in the way of activities and "wrapped in blue tissue paper" at mealtimes before being fed "at a speed which would not allow for any enjoyment of the food".

A chronic shortage of staff meant residents were left day in day out with little to occupy their time, in surroundings that were "impoverished and completely unsatisfactory". Since the inquiry was launched, staffing levels have been increased by 50 per cent.

The report says the standard of service was "simply not acceptable in the 21st century" and calls for Orchard Hill Hospital, home to more than 90 residents, to be closed.

It is the second inquiry in six months by the commission to expose shocking abuse of people with learning disabilities. A report last July revealed clients in Cornwall had been bullied, drugged and harassed by staff. Officials fear abuse may be nationwide and announced yesterday that up to 200 NHS and private services for the learning disabled would be inspected.

Many of the 186 people cared for by the trust in Sutton and Merton had epilepsy, were confined to wheelchairs or had problems such as difficulty swallowing. Almost all had been with the trust for at least a decade and needed 24-hour support. Though staff were mostly caring and well intentioned, the homes were run for their convenience rather than for the residents, which the inquiry defined as "institutional abuse".

Anna Walker, chief executive of the Healthcare Commission, said staff had been unaware that certain practices were no longer acceptable and could in some cases constitute abuse. She commended the trust, which has had seven chief executives in 10 years, for asking the commission to undertake the investigation. "But it does not excuse the neglect of the people in its care," she added.

Caroline Taylor, chief executive of Sutton and Merton PCT said the number of staff running the service had been increased from 295 to 442 in the past year, management had been overhauled and better training provided. The trust planned to close Orchard Hill Hospital by 2009.

"We are clear there were some appalling examples of individual abuse,"Ms Taylor said. "They were not widespread and probably could not have been foreseen. We are determined to make whatever changes are necessary urgently."

* Teenagers with mental health problems are receiving "inappropriate" care on adult psychiatric wards, according to the Children's Commissioner. A report by Professor Sir Albert Aynsley-Green, published yesterday, concludes adolescents are suffering because of a shortage of emergency beds and facilities.