An MI6 officer was discovered to have child sexual abuse images on his work computer but the charges against him were eventually dropped, the intelligence service has told an inquiry.

The illegal material was found in 2006 and the official was dismissed, the independent inquiry into child sexual abuse (IICSA) heard on Tuesday. The case was referred to the police who investigated. The Crown Prosecution Service (CPS) brought charges but it never came to trial.

Evidence about the Secret Intelligence Service (SIS), or MI6 as it is more commonly known, was given by an anonymous officer who testified at the inquiry via video link. Before 2015, he confirmed, the service had no specific policies relating to preventing or reporting suspected child abuse.

The officer, who is responsible for overseeing MI6’s compliance with the law, told the inquiry that pornographic material involving children was found by SIS staff in 2006. “When this material was discovered, it was [examined] and we conducted an internal investigation to find out which employee had been responsible,” he told the inquiry.

The images were passed to the police and an MI6 officer was identified. “The individual was then dismissed and he [faced] two charges of possessing indecent images of children on his workplace computer,” the officer told the inquiry. “Ultimately the prosecutor decided not to offer evidence against the defendant following an abuse of process application.”

The SIS subsequently wrote to the CPS to express its “disappointment” that the prosecution had been abandoned.

The inquiry was also told about an incident when a “contact” was found to have a cache of child sexual abuse images on his computer. In 2009, the man admitted to downloading them. The SIS passed the material to the police’s child exploitation and online protection command (CEOP) but detectives decided there was insufficient evidence to take action.

The anonymous officer also said a search through SIS files on behalf of the inquiry unearthed a note attached to an obituary of the former intelligence officer and diplomat Sir Peter Hayman, who died in 1992. Hayman was subsequently exposed as a member of the Paedophile Information Exchange organisation.

The inquiry heard the note, written by an MI6 officer, read: “An unpleasant and pompous man who used to like playing Father Christmas in Ottawa [where Hayman was high commissioner in 1974] so that he could dandle children on his knee.”

The MI6 officer said the service had found no evidence in its files of the existence of any “paedophile ring” or any suggestion that the government had attempted to conceal information about the existence of such a group.

Earlier this month, an MI5 lawyer gave evidence in a similar manner to the inquiry, revealing that the service told the cabinet secretary in the 1980s about rumours of a minister’s “penchant for small boys” but did not pass this on to police or launch an investigation into the claims.