Police chiefs admitted today that their infiltration of undercover police officers into protest groups had gone "badly wrong" and called for independent regulation of spying operations.

Amid mounting criticism of police over the handling of the Mark Kennedy case, Jon Murphy, who speaks on the issue for the Association of Chief Police Officers (Acpo), also insisted that undercover officers were forbidden from sleeping with activists to gather information.

Three official inquiries have been launched into Kennedy's seven-year infiltration of the environmental movement after a criminal trial collapsed last week. The row has also led to Acpo being stripped of its power to run undercover police units.

Murphy told the Guardian: "Something has gone badly wrong here. We would not be where we are if it had not."

He said senior police officers would welcome an outside body monitoring their use of undercover police officers. "We are left to regulate it ourselves, and we think we do a good job of it," he said. But he acknowledged: "Sometimes things go wrong. It is a volatile area of police work."

He added that the public would be reassured if there were a degree of independent oversight, though he added : "I am not saying we are regulating it badly.

"Historically, there appears to have been a reluctance for anybody else to take a role in the authorisation of undercover officers and informants in circumstances where they may be required to commit crimes in order to achieve the legitimate aims of the government."

Most damaging of the revelations in the past week have been claims that Kennedy slept with activists to get information. In an interview with the Mail on Sunday, Kennedy dismissed the allegations as a "smear campaign".

Today, Murphy made it clear that undercover officers were prohibited from sleeping with their targets under all circumstances. "It is absolutely not authorised," he said. "It is never acceptable for an undercover officer to behave in that way." He went on, however: "I am not naive, and I fully understand and accept that from time to time that there is an inevitability that that kind of thing will happen.

"It is grossly unprofessional. It is a diversion from what they are there to do. It is morally wrong because people have been put there to do a particular task and people have got trust in them. It is never acceptable under any circumstances ... for them to engage in sex with any subject they come into contact withl."

Deploying undercover officers into the protest movement was not disproportionate to the risk posed, he said. "There are many people who have got perfectly legitimate concerns about any numbers of issues about which they may wish to protest. They are perfectly decent, law-abiding people who have no intention of disrupting anybody's lives, let alone [of committing] an act of criminality.

"Unfortunately, in the midst of some of these groups – recent history would evidence this to be true – there are a small number of people who are intent on causing harm, committing crime and on occasions disabling parts of the national critical infrastructure. That has the potential to deny utilities to hospitals, schools, businesses and your granny."

He added that the challenge was how to allow peaceful protest to occur and yet still stop criminals.

Kennedy has said he knew of 15 other undercover officers who had infiltrated green protest groups in the past decade, and of four who were still undercover. Murphy said he did not know how many undercover officers had been sent into protest groups, but described it as a "niche business". "The vast, overwhelming majority" of undercover officers were used to catch serious criminals, he added.