A sergeant has been disciplined after an independent investigation found "plainly unacceptable" errors in police actions that left Dano Sonnex free to kill.
The Independent Police Complaints Commission will now write to all police forces in England and Wales to highlight concerns raised by the case.
It found that "significant individual and organisational errors" led to a 16-day delay in taking Sonnex off the streets.
Deborah Glass, deputy chair of the IPCC, said: "The failing on the part of the police was the result of confusion, poor communication and weak procedures and hard lessons must be learnt.
"It was a missed opportunity to stop Dano Sonnex and protect Laurent Bonomo and Gabriel Ferez from the terrible threat he posed."
Ms Glass said if officers had acted more quickly they "could potentially have prevented the deaths of two innocent young men".
She added: "To fully understand how Sonnex was out on licence and in a position to harm others so violently one must look at the catalogue of failures by the wider criminal justice system.
"The police response was plainly unacceptable - but the overall failure to protect Laurent Bonomo and Gabriel Ferez lies with the wider criminal justice system as a whole and all agencies involved must take responsibility."
The IPCC report found the Ministry of Justice informed Lewisham borough council of a recall to prison notice for Sonnex on June 13 last year.
He had been arrested for handling stolen goods while out on licence for a previous knife attack and robbery, and remanded in custody but then bailed.
But it took 16 days for police to respond to the notice and did not visit Sonnex's home until June 29, hours after the students were murdered.
The report found the notice was not dealt with as a matter of urgency and that "confusion, misinterpretation and poor communication between an inspector, sergeant and constable resulted in a serious delay" in the arrest.
Police had only been told of the notice seven weeks after the initial arrest and four weeks after Sonnex had been given unconditional bail.
The matter was treated as a "standard" rather than an "emergency" recall but the 96-hour target to return him to prison was still breached.
"The recall was complicated by some intelligence suggesting that Sonnex had been in possession of firearms.
"However, if the sergeant in this case had communicated better and effectively and assessed the risk, this delay could have been avoided," the report said.
"The investigation found the sergeant did not perform his duties adequately.
"This was a breach of the police code of conduct and he has received a disciplinary warning."
The Met has now put in place a "requirement for a continuous risk assessment to take place" when dealing with licence recall following a recommendation by the IPCC, the report said.
It also looked into the handling of Sonnex's attack on a pregnant woman two days after his earlier release from prison in February.
The woman and her partner were tied up and threatened in an incident which bore striking similarities to the murders of the students but no further action was taken against Sonnex as they were too terrified to give evidence.
Investigators found that the system of recording Multi-Agency Public Protection Arrangements (MAPPA) details was "inadequate" meaning borough officers were unaware of the need to get in touch with borough officers and the probation team.
The IPCC said it was satisfied action had been taken to rectify the situation.
It also found the detective constable who investigated the assault and visited the victims several times did inform the probation service of his concerns.