Police officers at "all levels" within Surrey Police investigating the murder of the schoolgirl Milly Dowler in 2002, knew that the News of the World may have hacked into her phone, but did nothing about it for almost a decade, according to a report by the police watchdog.
Former senior officers are described in the report by the Independent Police Complaints Commission as being "afflicted by a form of collective amnesia" over what they knew of the NOTW's illegal practices.
Although the IPCC tried to recover all internal accounts related to the Dowler investigation, their report criticises the way the case has been documented. Deborah Glass, the IPCC's deputy chair, says: "not all of the material that could have been expected to be produced could be located."
Milly Dowler, 13, disappeared as she walked home in Walton-on-Thames in May 2002. She was later found to have been murdered.
The public outcry over reports in July 2011 that the News International top-selling title had hacked the schoolgirl's phone led to Rupert Murdoch closing the NOTW, and Lord Justice Leveson being appointed by David Cameron to examine the ethics of Britain's press.
Ms Glass said that it was "scarcely credible" that no-one connected to the Dowler investigation recognised the relevance and importance of the information on hacking that Surrey Police had held in 2002.
It would almost a decade before the full scare of illegal practices inside the NOTW was exposed by the Metropolitan Police's Operation Weeting investigation.
The detective chief superintendent who was in overall charge of the Dowler case in 2002, Craig Denholm, is now Surrey's deputy chief constable.
The IPCC investigation states that Mr Denholm, Surrey's head of crime in 2002, was known to have received documents that referred to allegations of hacking. However the deputy chief constable claimed to have no knowledge of the illegal accessing of Milly's phone, and repeated this assertion throughout the IPCC probe.
The report says that given the extent of knowledge within investigation team, and inside Surrey Police as a whole, the IPCC investigation "found it hard to understand how he, [Denholm] the officer in charge, could not have been aware of the alleged hacking."
Surrey Police confirmed to The Independent that Mr Denholm will be remaining in his £128,000 a year post and will be eligible to retire in 2014 on a two-thirds salary next year. This follows the report concluding that the IPCC were "unable to find any witness or documentary evidence" that contradicted his assertion that he did not know the connection to the NOTW's alleged hacking.
Because time had passed and crucial evidence may have been lost or misplaced, the report states that there was "insufficient evidence" to launch a case of gross misconduct against Mr Denholm.
A second junior detective who was involved in the 2002 investigation, Maria Woodall, will also not face any disciplinary action. The IPCC said her junior rank and level of knowledge meant there was no case to answer on misconduct .
The IPCC report covered barely six pages. The full report was held back on the orders of the Crown Prosecution Service. A decision on whether or not to publish the full report will be taken by the IPCC after the current criminal cases relating to phone hacking have completed their full passage through the courts.
Surrey's chief constable, Lynn Owens, said she had met the parents of Milly Dowler and apologised for the "distress" that had been caused.
A Surrey spokeswoman confirmed that the chief constable had met Mr Denholm and had delivered "written and verbal words of advice" to him which related to failures in not assessing some of the material that had been sent to him which referred to phone hacking.
Tonight the Labour MP and shadow minister, Chris Bryant, said the report confirmed what he had long believed: that the police had known for years that the NOTW had hacked Milly Dowler's phone.
Adding to the report's comment that an "unhealthy relationship between the police and the media" had been "in play" during the Dowler case, Mr Bryant said "This shows the level of collusion there was between the police and News International that was never addressed, never investigated and never prosecuted."
Mr Bryant said he was "amazed that some of the officers involved were still in posts. Most people would worry that the police did act when it was the royal family being hacked, but not when an ordinary family from Surrey, who had already lost their child."
The lawyer who represents Bob and Sally Dowler, said they were pleased that the IPCC had investigated the way the Surrey Police had handled this issue. Mark Lewis, one of a small group of lawyers who helped expose the culture of illegal practices inside the NOTW, said "This was not the finest hour of the Surrey police force."
Details from Surrey Police's own internal investigation of the Dowler case, Operation Baronet, were handed to the IPCC probe. Evidence from Baronet contributed to the report's findings, among them the conclusion that "phone hacking was a crime in 2002 and it should have been investigated."
The IPCC probe said officers and former officers had "expressed surprise and dismay" that no investigation had taken place.
However which senior officers took the decision to by-pass the crime, and their reasons for doing so, were not discovered in any evidence gathered by the IPCC. The report says the "collective amnesia" among former senior officers is "perhaps not surprising given the events of 2011 and the public outcry that the hacking of Milly Dowler's phone produced."
Levi Bellfield, a former bouncer, was given a life-sentence in 2011 after being found guilty of abducting and killing the 13 year old.
MAIN QUOTES FROM IPCC REPORT
“The investigation found it hard to understand how he, [Craig Denholm] the officer in charge, could not have been aware of the alleged hacking.”
“It is apparent from the evidence that there was knowledge of this at all levels within the investigation team.”
“Former senior officers in particular appear to have been afflicted by a form of collective amnesia about this.”
“It is more surprising that alarm bells do not appear to have rung and connections made in 2007 when two people connected with the News of the World pleaded guilty to phone hacking offences.”
“We consider it scarcely credible that no one connected to the Milly Dowler investigation recognised the relevance and importance of the knowledge that Surrey Police had in 2002 before this information was disclosed by Operation Weeting.”
“Our investigation [the IPCC’s] concluded that there was insufficient evidence to support finding a case [against Craig Denholm] to answer for gross misconduct.”