Operation Haven was launched when nine people were arrested in raids on properties on the Isle of Lewis in the Western Isles and in England in October 2003, as part of a multi-force police investigation.
Those detained were charged with serious sex offences involving three girls from Lewis, all under 16. A number of children, believed to range from a few months old to primary school age, were also taken into care.
But, despite allegations of satanic rituals, animal sacrifices and other instances of serious abuse, the case against all nine defendants was dropped by the Crown Office in July 2004 before it went to trial. Five of the eight children initially taken into care were returned to their families.
Yesterday's report savagely criticised the length of time that elapsed before action was taken and the conduct of the operation itself. The Social Work Inspection Agency found there was sufficient cause for concern on the island as early as 1992.
Peter Peacock, Scotland's minister for education and young people, said the report exposed "yet another horrifying chapter" of child abuse and demanded those responsible for child protection in the Western Isles provide an action plan to sort out the weaknesses identified in the report by 30 November. According to the report released yesterday by the Social Work Inspection Agency, the inept investigation into allegations by the girls resulted in them suffering "severe and prolonged abuse".
The mother of the three girls had been abused by her own father. She already had a daughter when she married a man who had been convicted of indecently assaulting his child from a previous relationship. The couple went on to have a further two daughters before moving to the Western Isles from England.
When the allegations by the three girls first emerged, they and their mother were interviewed by social workers and the police but the Social Work Inspection Agency report said those concerned had failed to respond appropriately to child protection issues raised by the children's health problems and obvious distress.
"Tough decisions were not taken early enough. Staff from all agencies were not critical enough about what they were told by the children's parents about their care and their health," said the agency's Alexis Jay.
"We found evidence of physical abuse, emotional abuse and neglect, as well as symptoms and behaviour which are strongly suggestive of sexual abuse" the inspectors concluded.
"We believe that all three children were repeatedly sexually abused.
"Our conclusions are based on a range of evidence from records going back to 1989, witness statements from professionals who knew the children at different periods in their lives and also from the children's own statements," said Ms Jay. The report found that, despite the efforts of Western Isles Council and other agencies to improve the lives of the children, they continued to be abused and neglected until they were removed from their families.
"In our view, the children in [the] family should have been removed from home much earlier in their lives," said the report. The summary also said that, although information was being shared between agencies, it was not acted upon decisively, because welfare staff lacked expertise in working with adults and children where physical and sexual abuse was suspected.
The 154-page report made 31 recommendations, many of them applying to all local authorities and NHS boards, to help ensure there was never a repeat incident of a similar case. Its authors stressed that records relating to families who moved between council areas should be transferred immediately and local authorities should ensure there was a senior member of staff in every school responsible for passing on child protection concerns.
It recommended that all pre-school, primary and secondary school staff should also regularly take part in child protection training.
How the system failed
1989: First concerns raised about the family while they were living in England
1992: Further complaints made about the treatment of the children
1995: The family become involved with social services in the Western Isles following a move to the Isle of Lewis
October 2003: Raids on several addresses on the Isle of Lewis and in Leicestershire, West Yorkshire and Dorset in as part of a police investigation, called Operation Haven
July 2004: Charges against all defendants were dropped due to lack of evidence and an inquiry is set up by the Social Work Inspection Agency
In total, investigators discovered the family had contact with more than 100 health professionals and - between 1991 and 2000 - more than 220 indicators of sexual, physical and emotional abuse and neglect had been recorded
7 October 2005: The Social Work Inspection Agency concludes the three girls at the centre of the inquiry were abused and that they had been failed by the system.