The report found cases where "commissioners or the Commission as a whole bear responsibility for instances of fraud, irregularities or mismanagement" but said they had not personally benefited.
The findings, the most damning verdict delivered on Brussels, find Ms Cresson, a former French prime minister, guilty of "favouritism" and of staying silent over irregularities in the pounds 400m Leonardo education project even though she was "in full possession of the facts". They also attack the fundamentals of the institution itself.
As the Commission executive met to discuss the report, MEPs called for the resignation of Ms Cresson and Mr Santer.
Britain suggested that heads should roll. "It is clear the Commission needs to put its house in order," Downing Street said. "The Commission has made a start but a lot more needs to be done." Asked whether Mr Santer and Ms Cresson should resign, Number 10 said it was up to those criticised to "consider their positions carefully." Ms Cresson has emerged as the report's chief target. She was criticised over the appointment of a friend, the dentist Rene Berthelot, to the position of scientific adviser.
His appointment was "manifestly irregular", the five-strong inquiry argued, citing his frequent paid missions to his home town on supposed commission business as evidence of the "fictitious nature of the scientific advice he was supposed to be giving".
On Ms Cresson's handling of the Leonardo exchange project, the document says she "bears further serious responsibility for having failed, though in full possession of the facts, to inform the president of the Commission of the problems of implementing Leonardo One".
That meant decisions were being taken in the European Parliament on future funding of the project without crucial information being imparted.
More broadly, the findings question the whole operation of the Commission. The report says "protestations of ignorance on the part of commissioners concerning problems that were often common knowledge in the services, even up to the highest official levels, are tantamount to the admission of the loss of control by the political authorities over the administration that they are supposedly running."
Monika Wulf-Mathies, commissioner for regional aid, was also attacked for nepotism.
Others were cleared, including Joao de Deus Pinheiro, whose brother-in- law was appointed chef de cabinet, a senior post in the private office.
Fat cats share cream, page 4
Review, page 3