Prosecutors are considering whether criminal charges should be brought over undercover police officers' sexual relationships with unsuspecting women.

Derbyshire Chief Constable Mick Creedon is leading an investigation into various claims linked to Scotland Yard's mysterious Special Demonstration Squad, including allegations that they used dead children's identities and indulged in inappropriate relationships.

In a progress report published on Thursday, he said that the Crown Prosecution Service had been asked for advice over whether criminal charges should be brought over the relationships.

However, Creedon has found no evidence to back a number of other claims made by the former undercover officer Peter Francis, who alleged that he had been tasked to find information that could be used to smear the family of the murdered teenager Stephen Lawrence.

The report said: "Counsel has provided advice indicating that there are no sexual offences committed. However, the offence of misconduct in public office may be applicable. Evidence has been provided to the Crown Prosecution Service for advice."

It found that while management did not authorise the relationships, a document gave informal advice about those situations.

"The 'tradecraft' document provides advice recommending that if there is no other option operatives should try to have fleeting and disastrous relationships with individuals who are not important to your sources of information."

A number of people who claim they had relationships with undercover officers who did not reveal their true identities are taking legal action against the police.

The report said: "There are and never have been any circumstances where it would be appropriate for such covertly deployed officers to engage in intimate sexual relationships with those they are employed to infiltrate and target.

"Such an activity can only be seen as an abject failure of the deployment, a gross abuse of their role and their position as a police officer and an individual and organisational failing.

"It is of real concern that a distinct lack of intrusive management by senior leaders within the Metropolitan Police Service appears to have facilitated the development and apparent circulation of internal inappropriate advice regarding an undercover police officer's engagement in sexual relationships."

The report focuses on claims made by Francis in the Guardian and on Channel 4's Dispatches about the activities of undercover officers.

It said: "No evidence has been discovered to confirm that: Peter Francis was tasked to smear the Lawrence family or their campaign; He was tasked to smear or investigate Duwayne Brooks [a friend who was with Stephen when he was murdered]; He was tasked to provide information on 'black justice campaigns'; Managers within Special Branch prevented Peter Francis from making disclosures to the Macpherson inquiry; Family Liaison Officers shared information with Special Branch; Peter Francis obtained information which was subsequently provided to the Consulting Association" – the company which maintained an illegal blacklist of 'troublemakers' in the construction industry.