Vital evidence which could have secured the release of one of Britain's longest-serving victims of a miscarriage of justice 11 years ago was held in a forgotten forensic science archive on an industrial site in the Midlands, the Guardian can reveal.

Sean Hodgson walked free after 27 years in jail when his murder conviction was quashed yesterday. But an inquiry is being launched into why the Forensic Science Service wrongly told defence lawyers acting for him in 1998 that exhibits in the inquiry had been destroyed.

The court of appeal heard yesterday that had his legal team acquired the exhibits they would have submitted them for DNA testing, which, in all likelihood, would have secured his release 11 years ago.

Instead the inquiry went cold; Hodgson, who was in the prison hospital, became more seriously ill and his solicitor was unable to take further instructions.

It was not until last March when Hodgson, 57, wrote to a new legal firm, Julian Young solicitors, that efforts were made to search for the exhibits once more.

Hodgson, who suffers from a personality disorder, was jailed for life in 1982 after being convicted of murdering Teresa de Simone, a 22-year-old clerk who worked part-time behind the bar in the Tom Tackle pub in Southampton. Her body was found in her Ford Escort car on December 5 1979. She had been raped and strangled.

As lord chief justice, Lord Judge, quashed Hodgson's conviction for murder yesterday, he said the public would be concerned by the extraordinary case.

DNA tests on three samples from the victim's body - which were not available at the time of the conviction - conclusively proved that Hodgson was not the killer.

A further 20 exhibits from De Simone's car, clothes and body also contained none of Hodgson's DNA, the court was told.

The court heard that Hodgson, from Bishop Auckland, County Durham, had made several confessions but was a compulsive liar who had also admitted to two murders which had never taken place.

A year after the killing, Hodgson had made a confession to a priest while he was serving time in prison for theft, he made further detailed admissions to a prison guard and police officers in which he described seven details of the case which had never been made public. At his trial he pleaded not guilty but was convicted. An appeal a year later failed but Hodgson continued to protest his innocence between bouts of mental illness.

Rag Chand, a barrister who worked on the case, told the Guardian he spent four months looking for the evidence. There were no surviving papers in the case. Instead Chand trawled through local newspaper cuttings to piece together what had happened.

When it came to seeking the exhibits which the legal team wanted to submit for DNA testing, he was repeatedly told - like the legal team in 1998 - that they no longer existed. "The search was the most difficult thing I have encountered in my personal and professional life," he said. "It was like finding a needle in a haystack. But I persevered because I had a gut feeling that something was wrong."

By autumn last year Chand's tenacity had paid off when his information led the Forensic Science Service to an archive of evidence on an industrial estate in the Midlands which they appeared to have forgotten about. There they discovered exhibits from the investigation in 1979, which included swabs taken from De Simone's body, tapings of her clothes and the seats of her Ford Escort car.

It was only then that the DNA testing could take place.

Sarah Whitehouse, counsel for the Crown, told the court yesterday that the forensic regulator had been asked to investigate why the FSS had erroneously said in 1998 that the exhibits in the inquiry had been destroyed. "It is clearly an unsatisfactory state of affairs and we need to know what steps have been taken to ensure this never happens again," she said.

Hodgson's barrister at the original trial, Robin Grey, QC, was there to shake his hand as he was released. "As a human being I feel glad that we no longer have the capital punishment," he said. "As a defence barrister I didn't get him off, and I have bitter feelings of guilt about that."