Britain's biggest police corruption trial collapsed yesterday after investigators destroyed files of documents, marking the latest high-profile failure to convict officers accused of involvement in notorious miscarriages of justice.

Eight former policemen accused of perverting the course of justice over the wrongful conviction of three men for the murder of prostitute Lynette White in 1988 walked free after a review highlighted a "serious error" by police. A second trial of four other former officers due to be held next year has also been scrapped.

The Director of Public Prosecutions, Keir Starmer, yesterday ordered a "full and detailed" review into the failings of the prosecution of the South Wales Police officers, who had been investigated by a team from the same force since 2003. Swansea Crown Court heard claims yesterday that the senior investigating officer, Chris Coutts, instructed junior officers to dispose of files that prosecutors had earlier said were relevant to the case.

"It is highly likely... that there is an explanation for these events consistent with serious error rather than deliberate misconduct," said Nick Dean QC, who led the prosecution. He said that Mr Coutts "has not been able to be asked in detail" about his recollection of the events but there were no doubts over his honesty and integrity. The four files found to have been destroyed included a copy of a document that complained about members of the inquiry team and should have been stored away, the Crown Prosecution Service said.

South Wales Police declined to give more detail on the destroyed documents. The force said that it had referred the case to the Independent Police Complaints Commission.

The inquiry into potential police corruption was launched following the notorious case of the "Cardiff Three" – innocent men who were convicted in 1990 of the murder of Miss White, 20. She was found stabbed more than 50 times in her flat over a bookmakers' shop. Stephen Miller, Yusef Abdullahi and Tony Paris were found guilty of the murder in part based on witnesses bullied by police into giving false accounts against them. Two others were acquitted. Mr Miller's solicitor, Matthew Gold, said that he was shocked by the collapse of the trial, the BBC reported. He said his client continued to be "drastically affected" having served four years for a crime he did not commit.

The men were acquitted at the Court of Appeal in 1992. Lord Chief Justice Taylor said: "Short of physical violence, it is hard to conceive of a more hostile and intimidating approach by officers to a suspect."

Following a second investigation, Jeffrey Gafoor, a client of Miss White, pleaded guilty to her murder and is serving a life sentence.

The probe into police corruption was launched afterwards and was conducted by officers from the same force and was overseen by the IPCC from 2004. The investigation led to the arrests in 2005 of members of the original murder squad and two others who gave evidence against the five in 1990.

Most senior among them was ex-superintendent Richard Powell and ex-chief inspectors Thomas Page and Graham Mouncher. They were accused of conspiring with five other police officers on the original inquiry team. They all denied the charges.Outside court, Mr Page called for an inquiry. He said: "I'm just relieved that it's all over now after six and a half years."

The IPCC said no police misconduct charges would be brought against acquitted officers as they had left the force.

Police in the dock: Failed prosecutions

Birmingham Six Charges were dropped against three former detectives said by the Court of Appeal to have lied to secure the convictions of the Birmingham Six. The judge ruled that publicity meant they could not receive a fair trial – but accepted that the case had become "a synonym for forced confession".

Guildford Four Three retired detectives were cleared over accusations they fabricated evidence to frame the Guildford Four, who served 15 years in jail for pub bombings in 1974 that they did not commit.