And key evidence about Mitchell's mental health was underrated and not passed on to different agencies.
The inquiry, which made 49 recommendations, called for the scope of future mental health services to be broadened so that patients' psychological states were considered rather than just giving them medication.
Sir Louis Blom-Cooper QC, who chaired the inquiry, said: "Only then can there be a real hope and expectation that the seriously mentally disordered can be cared for and treated such as to reduce to an irreducible minimum the cases of homicide or near homicide."
In December 1994 Jason Mitchell, then 24, strangled an elderly couple, Arthur and Shirley Wilson, in their home in Bramford, Suffolk, after absconding from a half-way house. Five days later he strangled and dismembered his father, hiding the head, arms and legs in the loft.
Sir Louis said that the triple killings could not have been predicted and were not preventable. However he added: "Had different steps been taken at various stages from 1989 onwards the ultimate outcome might have been avoided."
Mitchell was sent to West Park Hospital, Epsom, Surrey, in 1990 after he assaulted a 70-year-old church cleaner with a baseball bat. A year later he was given conditional discharge by a mental health review tribunal.
He revealed his thoughts to Jackie Leaver, an occupational therapist at West Park, and in February 1991 she reported on his homicidal fantasies.
Ms Leaver recorded that he had once "carried a machete around with him and fantasized about how he would use it if attacked . . . He also had a thought that it would be a fun thing to do if he killed a vicar for Christmas in his hometown of Bramford".
She warned: "If Jason returns to his past way of life he could become a danger in the community."
But Ms Leaver's report was "dealt with dismissively by clinicians and members of staff" said the inquiry. "Had there been a concerted effort to elicit from Jason Mitchell himself the homicidal intention which he had fleetingly communicated to some people . . . there would have been a perceived need for clinical evaluation."
The report calls on those responsible for the care of the mentally ill to understand seriously disturbed behaviour in the light of their patients' emotional lives as well as their mental condition.
It also notes that lack of communication between agencies had exacerbated the problems. "The prison services did not operate sufficiently in harmony in ensuring that those discharged into the community, either from prison or hospital are properly supervised," said Sir Louis.
Records from when Mitchell was on remand and then in youth custody in the late 1980s showed he was exhibiting disturbing behaviour even then.
But these records were never seen by courts or doctors dealing with his case as they were lost in the prison system.
And when the mental health tribunal agreed that he could be conditionally discharged from West Park if suitable accommodation could be found, they were unaware of the seriousness of the attack he had made on the church cleaner, Jim Powell.
The panel recommended that in cases where serious or dangerous criminal acts involving mentally disordered people take place, the Crown Prosecution Service should prepare a "full account".
Details should be passed on to all those involved in criminal proceedings, clinicians and to the Home Office where patients are restricted. These papers should become part of the patient's clinical record.
Christopher Wilson, son of Arthur and Shirley said that there had been a "catalogue of errors". "I question the judgment of local professionals who considered Jason Mitchell suitable to be integrated into the community," he said.
And Marjorie Wallace, chief executive of the mental health charity Sane, said the inquiry showed that "the way in which the different agencies communicate is more like a game of Chinese Whispers - by the time the decision is made to discharge someone it is based on partial and often confused information[.
The health minister, John Bowis, said Sir Louis' report "makes it clear that there was no single act or omission that contributed to these tragic deaths".
Schizophrenic with ambition to climb 'social ladder of killing'
"I needed to make an impact killing - it had a big impact on me and the rest of society - because he was my father. In Silence of the Lambs he says he killed his parents when he was six [sic] years old. It had no bearing at all on my killing my father. If a job's worth doing it's worth doing well. I'd had an impact kill. I regret I didn't finish what I'd planned and killed more people."
"There was something about my feet. I had to walk silently or as quietly as I could. It's on a film or something...Silence of the Lambs...A horror film. I went straight to my father's."
"It was a dark night, the moon was full, it was quite psychotic, quite psychopathic, serial killerisitc, dead calm."
"It seemed to me as if I was on a social ladder of killing amongst killers"Reuse content