A report into physical and sexual abuse at children's homes that was suppressed for almost 20 years concluded there was "extensive" mistreatment of young people over a "substantial" number of years.

The Jillings report into residential care units in north Wales, which has finally been released, said the lives of many children had been blighted by the abuse they suffered while living at the homes.

It said the panel that investigated the abuse had considered abandoning its inquiry as it was not sure it had all the material from agencies including police and social services that it needed to see the whole picture.

The report also expressed concern that there was no independent mechanism to investigate serving or former police officers implicated in abuse. And it said it had simply not been able to address some areas including the suggestion that public figures had been involved in abuse.

The now-defunct Clwyd county council commissioned John Jillings in 1994 to investigate allegations of abuse against residents of children's homes in the 1970s and 1980s.

His report was completed two years later but not published amid fears it could open up the authority to compensation claims.

Calls for it to be published resurfaced last year after the BBC Newsnight report that led to false child abuse allegations against the former Tory treasurer Lord McAlpine.

Following freedom of information requests by the Guardian and others, the successor councils to Clwyd agreed to publish a heavily redacted version of the 300-page Jillings report.

It made clear that it was limited by a number of "constraining factors", including that it was unclear to what extent material held by North Wales police was available. It also said there was a lack of clarity about the accessibility of some social services files.

But it concluded: "Our investigations have led us to conclude that the abuse of children and young people in Clwyd residential units has been extensive and has taken place over a substantial number of years.

"It's clear in a significant number of cases the lives of young people who have been through the care system in Clwyd have been severely disrupted. At least 12 young people are dead."

The report said the role of other agencies including North Wales police and the Welsh Office needed "careful and detailed scrutiny".

It expressed concern there was "no mechanism to ensure that independent investigations are conducted of allegations against former and serving police officers".

The report added: "Time and time again the responses to indications that children may have been abused has been too little and too late. The criticisms apply not only to Clwyd county council but also to the Welsh Office and North Wales police."

Complaints that there had been a cover-up over Jillings led to an inquiry headed by the late Sir Ronald Waterhouse, which concluded in 2000 that there had been appalling mistreatment at homes over a period of 20 years.

At the time of the McAlpine controversy last year some former victims and politicians came forward to claim that the Waterhouse inquiry had been flawed and demanded that the Jillings report be finally published.

A police investigation ordered by David Cameron at the height of the McAlpine scandal is under way. So far more than 140 people have told police they were victims of abuse at children's homes across north Wales between 1963 and 1992.

Explaining why the Jillings report had been released, the successor councils to Clwyd said: "The north Wales councils recognise that the release of the report may bring distress to those affected by historic abuse and they encourage anyone who is affected by its release to call … if they need support. All councils have and will continue to support anyone affected by abuse."

Peter Wanless, the NSPCC's chief executive, said: "This report comments on appalling child protection failures that took place nearly 40 years ago but could just so easily be commenting on dreadful events happening today.

"While some things have improved – particularly for those in care – there is a depressing realisation that in some areas nothing has moved on.

"Jillings comments that the interests of children were often sacrificed by the very professionals who should have been looking after them. And when the young victims tried to raise the alarm people turned a deaf ear to their pleas for help.

"The same mistakes have been highlighted in recent grooming cases where young girls were abused in sickening ways for many years while those who could and should have helped stood by, leaving them to their awful fate.

"While Jillings is concerned with what went on from 1974 to 1993, we have to ensure this kind of abuse does not cast its long shadow over children today. We can only prevent it by giving children confidence to speak out, paying attention when they tell us they need protection and moving swiftly to justice – so 40 years down the line we do not find ourselves in this invidious situation again."

There was also criticism that many passages in the published report had been redacted.

A legal expert in abuse in residential care, Alison Millar, from the law firm Leigh Day, said: "The refusal to publish this report in full is tragically short-sighted. We are in an Alice in Wonderland situation whereby an independent panel is commissioned to investigate what went wrong and why. The report remains unpublished for over 15 years and then, when it is finally published, the report is effectively gutted so that important sections dealing with the very issue of what the panel found did go wrong are specifically excluded.

"The whole truth must come out, for the sake of all those affected and so that this can never happen again."

The report spells out the dreadful treatment meted out to boys who lived at the Bryn Estyn home in Wrexham – described by one former resident as "the Colditz of residential care".

It outlined how some boys were put on the "flat list" by the deputy head, Peter Howarth, and made to visit him in his apartment in their pyjamas with no underwear. They were sexually abused by him and forced to perform sex acts on each other. He bribed them with cigarettes, money and privileges.

Howarth was convicted and jailed for abusing children at the home.

The report also told how other staff members physically abused boys. One tortured a boy during canoe practice by holding the craft upside down.

Another staff member ordered older boys to "discipline" younger ones by urinating or defecating on them.

The report said there had been a "disturbing number of deaths and suicides" among former residents of children's homes in north Wales. It revealed how some had died after abusing drugs, solvents or alcohol. Of the 12 deaths of former residents the panel knew about, four had lived at Bryn Estyn. Others had become repeat offenders and served a number of custodial sentences.

The panel found that almost 4,000 statements were taken by police investigating abuse at children's homes during the period they looked at.

But the report said: "Of the many statements taken, it is unclear how many were forwarded to the Crown Prosecution Service for consideration. It is also unclear how many other professionals, including police officers, were named in these statements as perpetrators of assaults."

Though the report said the panel could not investigate suspicions that paedophile rings or famous people were involved in abuse of children, it did conclude: "It is clear that sex offenders can and do network."

It also carried a letter from a council officer to North Wales police noting concerns that a paedophile ring was operating in north Wales and pointing out that many names of possible suspects given to police had links to Bryn Estyn.

On the panel's struggle to get information from the police, the report said 130 boxes of files were passed on to detectives investigating child abuse from social services. The panel was not allowed to see these files as they were considered Sub judice (matter under consideration by a judge or court).

The report claimed the "interests" of the county council's insurers "played an important part in the events surrounding the investigation of child abuse in Clwyd", and added: "We know that this is not a situation that is unique to Clwyd."

A bitter irony, given that the report was suppressed for 17 years, was that some victims clearly relished the chance to tell their stories.

One told the panel: "This is the first time I have ever felt heard." The report's parting shot was: "We hope that all those who participated in our investigations will ultimately benefit from the experience of speaking out in the hope of being heard."