Ministers, the police and social workers have been accused of a "shocking" failure to prevent the spread of modern slavery in the UK, leading to sexual exploitation, forced labour and the domestic servitude of adults and children from across the world.

Describing government ministers as "clueless" in their response to tackling human trafficking, both into and within the UK, the most exhaustive inquiry yet conducted into the phenomenon concludes that the approach to eradicating modern slavery is fundamentally wrong-headed. Instead of helping vulnerable victims who are trapped into forms of slavery after being trafficked from overseas, the legal system prosecutes many for immigration offences.

The major study by the Centre for Social Justice, which will be published on Monday, says that political indifference and ignorance alongside a leadership vacuum in Whitehall has meant that the country that led the way in abolishing slavery in the 19th century is now a "shameful shadow" of its former self as the practice makes a comeback in a contemporary guise.

To restore Britain's reputation on the issue, the centre's report outlines more than 80 recommendations, including the appointment of an independent anti-slavery commissioner, to ensure proper political focus and new legislation to better protect victims.

Researchers were stunned at the lack of awareness of the problem among frontline officials whose job it was to identify and help trafficked victims. "We have encountered unacceptable levels of ignorance and misidentification of victims among the police, social services, the UKBA [UK Border Agency], the judicial system and others," said the report.

Social workers, it added, were "not equipped" to identify victims of modern slavery. One charity described how it was normal for just a couple of hands to be raised when a room holding 40 social workers was asked if anyone knew about the national referral mechanism, the government's system for identifying and protecting suspected trafficking victims.

Police, too, were found wanting, with officers often choosing to arrest trafficking victims instead of protecting them. One deputy chief constable recalled the case of a girl who had managed to escape from a brothel and flee to a police station where she described how she had been trafficked. "She had no passport. Under these confusing circumstances, we chose to arrest her for being an illegal immigrant," he said.

A detective inspector admitted that there was no political encouragement to tackle slavery. "Human trafficking is not a performance indicator for police. Until it is, there is more incentive to investigate a shed burglar," he said.

Another officer told researchers: "So what do we do when we find them? We charge them. We nick them. Is that the best victim care?"

Although the government has requested that each force have a senior officer responsible for human trafficking, only half of the 33 forces that responded had appointed one. In addition, 90% of police officers had ignored an online educational course designed to raise awareness of modern slavery.

Entitled It Happens Here, the CSJ study collated evidence of exploitation of foreign adults and children as well as British citizens, in factories, fields, construction sites, brothels and houses. It identified more than 1,000 cases, but cautioned that official figures remain "a pale reflection of the true size of the problem". Christian Guy, managing director of the centre, said it was appalling that many of those who fall into modern-day slavery were themselves considered criminals.

The 224-page report was written after an 18-month investigation during which a team of experts interviewed hundreds of witnesses, including journalists from the Observer. Guy said: "We have been shocked by many of our findings. A leadership vacuum at the heart of Westminster; a messy legislative framework; frontline professionals – however well meaning and brilliant in some areas – forced to swim against a tide of indifference if they wanted to fight this crime; official bodies failing in their duty of care, with little idea about the scale of the problem.

"Our research has uncovered a shocking underworld in which children and adults, many of them UK citizens, have been forced into lives of utter degradation. Yet the authorities are either failing to understand the nature of this abuse or turning a blind eye to its existence."

The investigation found large numbers of people were being used for forced criminality, including benefit fraud, organised begging, and forced pickpocketing and drug cultivation, the last frequently involving young Vietnamese people on cannabis farms. Yet experts identified a pervading mentality at the UKBA that victims had often made a choice to be involved in such criminality, rather than the fact that they were being exploited.

Large numbers of incidents of British girls being trafficked within the UK were also found, mainly for sexual exploitation. In one case a girl taken into captivity by a group of men was allegedly raped 90 times over the course of a weekend.

Even when rescued from their abusers, the report lamented that the state regularly failed to keep victims safe. The centre cites figures that 60% of children placed in local authority care and believed to have been trafficked then go missing – often because they are so terrified of their traffickers that they take the first opportunity to go back.

In one case which was described to the CSJ, a boy who had been trafficked into the UK who was taken into care disappeared on a visit to the dentist, climbing out of a window to return to his abuser.

"Elements of control in these cases can be subtle and difficult to identify; this control frequently takes the form of sexual and other forms of violence, physical or emotional abuse, threats of violence towards family members," said the report.

Andrew Wallis, chief executive of the anti-trafficking charity Unseen, who worked on the report, said: "We simply cannot be satisfied with our current efforts to prevent this vile trade from happening. We have allowed human beings in the UK to be bought and sold as mere commodities for profit, gain or gratification. How on earth have we arrived at a place where there is no ambition or leadership to stamp out this appalling crime?"

The CSJ study calls on parliament to pass new anti-slavery legislation aimed at requiring companies with turnovers above £100m a year to publicly disclose the efforts they are making to ensure that their supply and product chains and business practices are free from modern slavery. Similar legislation is in force in California, where it has proved successful in cutting abuse.

The report also hopes to tackle one of the myths associated with human trafficking, namely that it is an international crime overwhelmingly affecting women and children. Of the 2,077 potential victims of modern slavery identified by the UK Human Trafficking Centre in 2011, 40% were men.