A DAMNING report into the collapse of one of Scotland’s biggest child sex investigations will state that the children were subjected to years of physical and sexual abuse.

The inquiry into the satanic abuse investigation in the Western Isles will demand a radical overhaul of Scotland’s child protection system in the wake of the fiasco.

Seven men and one woman were arrested in 2003 in a series of co-ordinated raids on the Isle of Lewis and in Dorset, Leicestershire and West Yorkshire.

They were charged with sex offences involving girls under the aged of 16. However, all charges were dropped without explanation by the Crown Office last year.

Nevertheless, the report, by the Social Work Inspection Agency (SWIA), concludes that there was clear evidence that the children had been subjected to “severe and prolonged abuse” of a physical and sexual nature “over many years”.

The report, which runs to more than 150 pages and is due to be published later this month, adds that the “disturbing” case has “serious implications for all those involved in delivering child protection services in Scotland”.

It identifies a range of shortcomings in the way information on vulnerable children is shared between the police, health and social workers and makes 31 recommendations to plug the gaps. In light of the findings, ministers are drawing up plans to reform the way testimony is gathered by lawyers from alleged child abuse victims.

Meanwhile, solicitors acting for some of those wrongly accused have warned that the report could lead to legal action against Western Isles council if social workers are found to have acted negligently. The findings will also reignite calls for an explanation as to why the 18-month police investigation — spanning four forces, 100 officers and costing more than £100,000 — collapsed and why the girls’ abusers have not been brought to justice.

The case has echoes of the Orkney child abuse scandal in 1991, when nine children were placed in care following allegations of ritual abuse by their parents and a minister. However, the 133-day investigation collapsed due to lack of evidence.

The SWIA inquiry, carried out at the behest of Western Isles council, examined about 220,000 documents amassed during the Lewis investigation.

“There are a number of recommendations which are far-reaching and will mainly affect the social work and health agencies, but there are implications for across Scotland and beyond,” said a source close to the Scottish executive. “One of the things that leaps out is that those involved in the case are in absolutely no doubt the children were very badly sexually and physically abused.”

The report also urges ministers to tighten up the guidelines on obtaining testimonies from child witnesses in cases involving a large number of alleged victims and abusers.

Under measures to be announced by ministers later this year, defence and prosecution lawyers would lose the right to question alleged child abuse victims separately. Instead they will be required to agree a line of questioning to be made by a professional agent during videotaped interviews.

Last night Kenny MacAskill, the Scottish National party shadow justice minister, demanded the rapid implementation of the report’s recommendations. “Clearly, disturbing lessons will yet again be learnt,” he said. “It is a very difficult area for all authorities but co-operation across borders and jurisdictions is fundamental in this modern age.”

Last week, some of those arrested on Lewis said they were still furious at the way they had been treated and dismissed the report’s finding that the children had been abused.

“My name is still mud, I lost everything, I lost my job, my car was vandalised,” said Neil Stretton, 51, who now lives in Leicestershire. “I’m not surprised they insist there was sexual abuse, I would say they are covering their backs.”

“A lot of people have been waiting for this report, for some explanation as to why so many innocent people were treated like criminals,” added Ian Campbell, who was taken from his home and confined to a safe house for six months.

“We want it to be made public how this investigation was carried out, how the information was gathered and interpreted, because that’s what’s been hidden from the public.”

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