Birmingham council "disastrously" failed to act when a group of Muslim men began to promote, sometimes illegally, a fundamentalist version of Islam in some schools, because officials were afraid of being accused of racism or Islamophobia, a report has found.

The investigation, carried out by the independent adviser Ian Kershaw, was commissioned by Birmingham City council (BCC) as a result of concerns raised in a letter dated 27 November 2013, known as the "Trojan horse" letter, which suggested a number of schools in the city had been "taken over" to ensure they were run on strict Islamic principles.

The Birmingham report, compiled by Kershaw and overseen by a review group that included senior Home Office official Stephen Rimmer and representatives of the West Midlands police, interviewed many of the same witnesses and reviewed the same documents as the former counterterrorism police chief Peter Clarke, who was commissioned by the then education secretary Michael Gove to address extremism in Birmingham schools.

But the two reports drew widely different conclusions, with Kershaw concluding that the activities of governors – alleged to have promoted an Islamist agenda – was restricted to a handful of schools and did not amount to the imposition of "a hardline, politicised strain of Sunni Islam" on children, as claimed by Clarke.

A draft of Clarke's report, leaked to the Guardian on Thursday night, uncovered evidence of "coordinated, deliberate and sustained action to introduce an intolerant and aggressive Islamist ethos into some schools in the city".

Kershaw found there had been a "determined effort to change schools, often by unacceptable practices, in order to influence educational and religious provision for the students served". But he noted that this effort was partially fuelled by a "genuine and understandable desire" to improve standards for children from an ethnic minority group that had long been poorly served by education in the city.

He found "no evidence of a conspiracy to promote an anti-British agenda, violent extremism or radicalisation of schools in east Birmingham". .Kershaw found that some headteachers and governors had broken the law by introducing Islamic assemblies without the correct authorisation. The main culprits were "men of Pakistani heritage" who "moved between schools as they tried to spread their agenda through the unacceptable bullying and harassment of headteachers".

The report identifies "serious governance issues that exist in a small number of schools in east Birmingham as a result of, at best, poor skills, and at worst, serious malpractice, by members of certain governing bodies".

Some children were forced to take part in Muslim worship, Kershaw said. "The use of call to prayer for Muslims in some schools has led to the coercion of young people into participation in worship during the day. This is unacceptable for children whose parents have not sent their children to school to receive a religious education. Many parents choose to send their children to a secular school, rather than a religious school of Christian denomination or an Islamic faith school, because it is not offering a faith-based ethos or religious education."

Kershaw criticises Birmingham council's poor whistleblower protection, and even accuses it of being used as a "vehicle for promoting some of these problems, with the headteachers being eased out through the profligate use of compromise agreements, rather than supported".

"BCC's inability to address these problems has been exacerbated by a culture within BCC of not wanting to address difficult issues and problems with school governance where there is a risk that BCC may be accused of being racist or Islamophobic."

Kershaw said the council appeared more keen to promote community cohesion in the multicultural city than to provide proper oversight: "The proper commitment of BCC to community cohesion has at times, and disastrously, overridden the even more important commitment to doing what is right. In other words, there is a culture that has been allowed to develop inside BCC's Services for Children and Young People that causes senior and more junior officers to shy away from confronting and dealing appropriately with unacceptable behaviours of some governors and some governing bodies."

Particularly damning is Kershaw's finding that "a significant number of those governors acting unreasonably have been local authority governors", that is, appointed by the council. He said such figures ought "normally have been expected to set an example of high public service standards in displaying integrity, honesty and objectivity. Instead they have played a part in leading unacceptable bullying and harassment of headteachers and members of leadership teams".

The report found that a small group of governors had:

• placed unreasonable demands on head teachers to "modify curriculum provision, which denies students their right to access a broad and balanced curriculum, including the right to understand other world religions and the right to sex and relationship education".

• placed "inappropriate demands on head teachers by repeatedly requesting information".

• been "overly challenging and sometimes aggressive in the management of head teachers".

• inappropriately appointed friends and relatives to the school staff.

• undermined head teachers during Ofsted inspections.

Kershaw found that elements of the five steps referred to in the Trojan Horse letter for taking over schools were present in a "large number of the schools considered as part of the investigation".

These five steps were to: target poorly performing schools in Muslim areas; select parents to turn against schools; install governors to encourage Islamic ideals; identify key staff to disrupt from within; and to instigate a campaign of pressure.

Kershaw found evidence of all five steps at Golden Hillock School, Moseley school, Nansen primary school and Saltley school. All of those schools, with the exception of Moseley, were recently put into special measures after emergency Ofsted inspections downgraded them to "inadequate".

There was no evidence of all five at Park View Academy, which has been at the centre of the controversy.

Kershaw concluded that the evidence collated to date "does not support a conclusion that there was a systematic plot to take over schools".

He added: "There are concerns which require immediate attention, but the evidence is not sufficient to lead me to construe the behaviour to be a coordinated plan to improperly influence the direction and management of schools (or academies) serving schools of predominantly Islamic faith or Muslim background."

The two reports follow investigations by the Department for Education and Ofsted. Ofsted inspectors had placed five of the schools in special measures, citing overzealous involvement by governors in the running of schools and a failure to protect pupils from the risks of exposure to extremism.

The Ofsted chief inspector, Sir Michael Wilshaw, said his staff detailed instances of head teachers said to have been forced out or sidelined in conflicts with governors or trustees.

Of the five schools, four had been granted academy status by the DfE, placing them outside the authority of Birmingham city council. The council itself has aggressively pressed ahead with promoting academy status on its schools.

Clarke's report puts some of the blame on this detachment: "In theory, academies are accountable to the secretary of state, but in practice the accountability can almost amount to benign neglect where educational and financial performance seems to indicate everything is fine."

Tristram Hunt, Labour's shadow education secretary, said Clarke's remarks condemned the promotion of academies in recent years.

"There is a dangerous lack of oversight in David Cameron's schools system and the results of this are being played out in Birmingham. Peter Clarke is right to describe the government's approach as one of 'benign neglect' – ministers failed to act on warnings they were given in 2010," Hunt said. "Standards are being damaged and schools exposed to risk because of an ideological refusal to give local areas new powers to oversee schools."

Gisela Stuart, the Birmingham Edgbaston MP, wrote in the the Birmingham Mail: "Whatever the outcome, it is worth remembering that turning Birmingham's Muslims into a suspicious community, as happened to the Irish in the 1970s, neither helps nor solves anything."