The campus police officer who pepper-sprayed students during an Occupy protest at the University of California, Davis, has been fired despite being cleared of wrongdoing by an internal affairs investigation.

The university dismissed Lt John Pike on Tuesday, it has emerged, eight months after video footage of his use of the spray on seated students triggered worldwide indignation.

The incident on November 18, in which Pike appeared to casually use the spray on students who posed little or no threat, was viewed millions of times on the internet and put huge pressure on the university.

Authorities put the officer on paid leave pending investigations into his conduct and this week terminated his $110,000-a-year contract.

"The needs of the department do not justify your continued employment," UC Davis police chief Matthew Carmichael said in a leaked letter.

But in an unexpected development the Sacramento Bee reported that an internal affairs investigation concluded Pike, 39, who served on the campus force for 11 years, had acted reasonably. The 76-page report by a Sacramento law firm and private investigator hired by UC Davis interviewed at least 27 police officers, including Pike, plus chancellor Linda PB Katehi and other university leaders.

"For reasons detailed in this report, we conclude that Lieutenant Pike's use of pepper spray was reasonable under the circumstances," it states. "The visual of Lieutenant Pike spraying the seated protesters is indeed disturbing. However, it also fails to tell other important parts of the story."

The report, dated March 1, said Pike repeatedly warned students who had gathered on the quad to protest against rising tuition costs that they would be sprayed if they did not disperse, and that "the police officers were fully encircled by protesters who had locked arms and would not let the officers exit".

It concluded that Pike voiced serious concerns about plans to remove the protesters and wanted the operation called off.

Asked by investigators about perceptions of his "nonchalant demeanor" as he sprayed the students, Pike replied: "I take my job very seriously. Any, any … any application of force … umm … for me it's not a … it's not a thrill ride … it's not 'woo hoo, this is gonna be fun, I get to hurt somebody.' That's not it."

His goal was "to gain compliance, so that I can get my troops out of there, my suspects out of there, and get a job done," he told investigators.

"So, if that's a critique, that I did my job in a manner-so-factly that I looked relaxed, well, then, maybe let's say that I'm relaxed because I'm professional."

Spraying was "appropriate" and "prevented further escalation" of the incident, he said. "Grappling [with students] would have escalated the force, whereas pepper spray took 'the fight out of them."

Other officers endorsed the view that they were under threat. Students have disputed that, saying the protest was peaceful.

A review of the report by a separate panel comprising a UC Davis police captain and the campus chief compliance officer was more critical of Pike.

In recommendations issued on April 2 it found some of Pike's actions "were not reasonable and prudent", that he lost "perspective on the operation as a whole" and showed "serious errors of judgment and deficiencies of leadership". It urged an "exonerated finding" and punishment ranging from demotion to a suspension of at least two weeks.

However, Carmichael, who took over the campus police earlier this year, rejected both reports. In a letter dated April 27, according to the Sacramento Bee, he accused Pike of ignoring orders to use minimum force and said he would be fired.