The Metropolitan Police’s approach to tackling corruption within its ranks is “not fit for purpose”, a watchdog has found.

The force has not learned lessons from the notorious unsolved 1987 murder of private investigator Daniel Morgan, overall its procedures for rooting out corrupt staff are “fundamentally flawed” and it has a “degree of indifference” to the risks, according to damning findings published on Tuesday.

The Home Secretary called in Her Majesty’s Inspectorate of Constabulary and Fire and Rescue Services (HMICFRS) after an independent inquiry into how the force handled Mr Morgan’s case found it was institutionally corrupt, saying it had concealed or denied failings to protect its reputation.

Inspector of Constabulary Matt Parr said that the Met had “sometimes behaved in ways that make it appear arrogant, secretive and lethargic” and that the watchdog’s 20 recommendations for change must be “among the commissioner’s highest priorities” in order to restore public trust in the force.

He said: “It is unacceptable that 35 years after Daniel Morgan’s murder, the Metropolitan Police has not done enough to ensure its failings from that investigation cannot be repeated.

“In fact, we found no evidence that someone, somewhere, had adopted the view that this must never happen again.

“We found substantial weaknesses in the Met’s approach to tackling police corruption. From failing to properly supervise police officers who have previously committed offences, to inadequate vetting procedures, and much more besides, it is clear that the current arrangements are not fit for purpose.

“The Met’s apparent tolerance of these shortcomings suggests a degree of indifference to the risk of corruption.”

According to the findings:

– In the last two years, the Met recruited people with criminal connections and more than 100 people who have committed offences. Some of these decisions “may have been justifiable, but the force failed to properly supervise these people to lessen the risks”;

– Property and exhibits procedures were “dire”. Hundreds of items were not accounted for, including cash and drugs. In one instance, the security access code for a property store was written on the outside of the door;

– The force does not know whether all those in sensitive posts – such as child protection, major crime investigation, and informant handling – have been cleared to the level of vetting needed;

– More than 2,000 warrant cards issued to personnel who had since left the force were unaccounted for.

Priti Patel said she was “very disappointed that serious issues still persist”, adding: “Standards must be immediately improved. I expect the Mayor of London and the new Commissioner to reverse these deficiencies as a matter of urgency.”

Mayor of London Sadiq Khan said the findings were “deeply worrying”, adding: “It is crystal clear to me that action needs to be taken at the highest levels of the Met in order to regain the trust and confidence of Londoners.”

The watchdog did, however, praise the force’s “impressive” ability to investigate the most serious corruption allegations and work to support whistleblowers, while recognising it had “greatly reduced” the number of personnel who were not properly vetted.

The inspection also found “no evidence of any deliberate or co-ordinated attempts” by the Met to “frustrate” the work of the Morgan inquiry and although it was “much to criticise”, based on this inspection “it would not describe the Met as institutionally corrupt”.

Mr Morgan’s family – who are suing the Met – said “unless and until” there are “root-and-branch changes” in its leadership team, “we consider we are unlikely to see any meaningful progress within the Met in relation to police corruption”.

The force welcomed the report but said it was “deeply concerned at the criticisms” and was “urgently reviewing our systems and processes”, adding: “There is a lot we need to improve on.”

Deputy commissioner Sir Stephen House said he was “professionally disappointed” that some of the force’s anti-corruption measures “have not been working well enough” and this was “already being put right”. But he added: “There are some areas where our judgment is different from the police inspectorate.”

The force accepted “there is a lot of work to do in order to rebuild the trust people have in us” and “we remain completely focused on building a police service Londoners can be proud of”, Sir Stephen said.