A secret Metropolitan police report warned police chiefs that they needed to take tougher action to stop officers discriminating against black people, and that a failure to do so would threaten a breakdown in community confidence.

Metropolitan Police sign

The report, obtained by the Guardian, warned top officers that innocent African-Caribbean people were being stopped too often by officers, who wrongly “racially stereotyped” them as criminals.

The report was by Brian Paddick, the Liberal Democrat candidate for London mayor, who was then a Met commander. He says his bosses ignored the warnings made in 2004 and buried the report.

For the past week allegations of racism in the ranks have dogged Scotland Yard’s leadership. The Met has been dealing with a growing racism scandal, which was triggered when the Guardian revealed an audio recording of an officer racially abusing a man in east London.

On Thursday the Met said 20 police officers and one staff member were under investigation for alleged racist incidents, and that eight police officers and a civilian worker had been suspended. The allegations include assault, abuse and bullying.

Senior figures with close knowledge of the Met say it was a scandal waiting to happen. Tarique Ghaffur, a former assistant commissioner at Scotland Yard, said: “The leadership took their eye off the ball on racism for some time.”

Ghaffur left his post after a race row that engulfed the top of the Met in 2008, suing the force for discrimination but later withdrawing his claim as part of a settlement.

He added: “Racism became more covert, but it is a minority of officers. Bernard Hogan-Howe [the Met commissioner] will take a strong view on this and be proactive, and needs to be.” David Michael, a former detective chief inspector and founding member of the National Black Police Association, said the force should use outside help to address police racism.

The sense that this week’s crisis has been waiting to happen is strengthened by revelations about Paddick’s eight-year-old report. It shows that top officers were warned to be more vigorous in tackling prejudice in the ranks, and told that a failure to do so would cause alienation. The report, written for senior colleagues, was marked “Confidential, not to be circulated or copied”, and urged a radical overhaul of stop and search.

The report says officers were racially stereotyping African-Caribbean people as criminals, and thus disproportionately subjecting them to stop and search. It says officers were exercising the power without having the legal requirement of having reasonable suspicion that the person stopped was involved in crime: “Many police officers make the illegitimate step in their minds from ‘black people are disproportionately involved in crime’ to ‘the black person I am about to stop and search is likely to be a criminal’ without consideration of the other factors necessary to establish sufficient ‘reasonable grounds’.

“This completely understandable mistake amounts to racially stereotyping black people as criminals and this will be portrayed by some of our critics as deliberate police racism of the ‘racial hatred’ variety.”

African-Caribbean people are more likely to be victims rather than perpetrators of crime, the report adds. “In fact, a small minority of black people are committing a large number of criminal offences whilst the vast majority of black people are law-abiding (and there are sound socio-economic reasons why that small minority are drawn into crime). With black people also disproportionately represented amongst victims of crime, a young black person stopped and searched at random is statistically more likely to have been a victim of crime than be a currently active criminal.”

The report’s warning that a failure to change could lead to alienation was prescient given the fact that inquiries into last summer’s riots cite anger at police stop and search as a factor.

Paddick said if stop and search continued to be used excessively against ethnic minority communities, “the ‘outcome’ is continued and accelerating discontent amongst minority communities and the danger of alienating significant sections of society”.

Hogan-Howe said in January that he wanted the arrest rate from all stop and searches to increase from 6% – the lowest for an urban force – to 20%. Paddick said yesterday: “For years the Met leadership have been refusing to admit it. In 2004 it was obvious we had a problem with racism, but nothing was done about it. If the Met had addressed stop and search, the chances of the riots happening would have been lessened.”

His report dismisses police reasons for the excessive stopping of black people. One defence says black people are more likely to be stopped because they are more likely than white people to be out on the streets.

“That there are large numbers of a particular race and age group on the street at a particular time is no justification in itself for disproportionality. White old age pensioners are not disproportionately represented amongst those stopped and searched on summer evenings between 6pm and 8pm in traditional English seaside resorts even though they make up the majority of the street population.”

Paddick’s report summarises the arguments of more liberal thinkers in the police, but he and other reformist colleagues over the years have been frustrated by a lack of change.

The Met said it could not comment on the Paddick report, and added: “The Metropolitan police service however has a history of welcoming internal and external discussion papers on stop and search, from academics, research bodies and serving officers, in order to inform the debate on stop and search. In consequence, the MPS is constantly adapting and evolving its stop-and-search policies; public accountability, scrutiny and feedback play a vital role in shaping the use of stop and search in London.”

The Met is being threatened with two legal challenges over allegations that it discriminates in its use of section 60 stop and search, which does not require reasonable suspicion.

One challenge is being considered by the Equality and Human Rights Commission, which believes the Met’s use of section 60 is unlawful.

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