At 9.02am Richard Felstead answered the phone; by 9.03am he was breathless with crying. It was the coroner's assistant in Battersea with the news that his sister, Carole, had died two weeks earlier. "I'm sorry it's taken so long to notify you," she said. "Carole's next of kin told us there was no family. But a letter was found – from you."

Two minutes later, the phone rang again. A different caller, with a strange voice, said, "I know you're not one of the ones that harmed Carole."

"Who are you?" said Richard.

"I'm Carole's next of kin."

"What's your name?"

"That's not important."

"How did Carole die?"

"She had a very difficult childhood."

"What? No she didn't."

"The cremation's tomorrow. People have taken time off work. It's very important it goes ahead."

Richard reacted furiously. The phone went dead.

The brothers gathered at their parents' Stockport home: Richard, David, Anthony and Kevin, whose principal memory of the morning of 14 July 2005 is his mother, "Finished. On the floor. Drained. Shattered. Gone." They began talking. Who was the mysterious caller who claimed to be Carole's "next of kin"? Why did she talk of a "difficult childhood" when Carole was happy and popular? She had a successful nursing career down in London. How could she die at just 41? Why had it taken two weeks to be informed? How could there be a funeral tomorrow?

Joseph, their father, stood up. "I'll put a stop to it."

"You can't stop a funeral, Dad!" said Kevin.

Joseph phoned the coroner's assistant. She brusquely informed him that, now the family had been discovered, the funeral would be halted. She mentioned a "life assessment", written by Carole. "It's very upsetting," she said. It was six pages, typed. It said: "My parents were abusive in every way imaginable − sexually, physically and emotionally. At three years of age, my mother smothered my sister. She sat me on top of her body and set the house on fire."

Joseph was astonished. "Had she been ill?" he said. "Had she been sectioned?"

The coroner's assistant replied: "Yes."

Over the coming weeks there came more questions. They were told the nameless "next of kin" had emptied Carole's flat and driven off in her car. Officials kept mentioning a "psychiatrist friend" who accompanied Carole to medical appointments. Joseph was speaking to a police inspector when something occurred to him. "This psychiatrist and this next of kin," he said. "Are they the same person?"

"That's right," said the inspector. "Dr Fleur Fisher."

The Felsteads' search for answers to the many mysteries surrounding Carole's decline is now in its sixth year. Endless letters and FOI requests, alongside hours of legal research and long nights on the internet, have resulted in the collection of hundreds of documents and the generation of yet more questions: angry ones about individuals they believe to have been malign presences in her life; strange ones about startling and little-known corners of human psychology; sad ones about the life and death of the kind and sparky woman they still miss every day.

When I tell them I'd like to write about Carole, they pass me the telephone number, discovered in Carole's phone records, of the woman whose role in the tale is, they're convinced, both sinister and central: that of the "next of kin", Dr Fleur Fisher.

"I'm not sure I want to talk about this," Fisher tells me. "You'll have to let me think about it. That family – they're bloody terrifying."

"You're frightened of them?"

"They're frightening people. And the things they've been saying," she says, adding confusingly: "I'm not a therapist!" She rings off, warning me darkly: "Tread carefully."

The house in which Carole grew up has mauve and dark-red rooms that are shadow-struck and decorated with golden candlestick holders, old family portraits and statues of dogs, birds and deer. Today Joseph sits glowering in the lounge, his patriarch's hands gripping his armchair. Kevin – a softer presence – informs me that Richard's at work, and Anthony's too distraught to speak. Their mother, Joan, passed away last year. David's here, though, friendly yet possessed of an anxious, wiry tension. Over the coming hours, he'll answer questions with flumes of facts and furious analysis, fossicking in boxes for the relevant document to illustrate his point.

For these men, Carole's life is as much a mystery as her death. She had been a friendly, bolshy and academically successful teenager, who loved watching M*A*S*H and wearing the tartan shorts beloved of her favourite band, the Bay City Rollers. She was popular at school and had a noted instinct for caring, going out of her way to play with Michael, the neighbour with Down's syndrome, and paying regular visits to a lonely old man down the road known as Mr Partridge. At 15 she got a weekend job in a home for the disabled. At 21 she qualified as a nurse at Stockport College and rented a nearby flat, making frequent visits back home to borrow milk and money, and sunbathe in the garden. And then, in the mid-1980s, there began a silent drift away from the family.

"Her attitude became hostile," says Joseph.

"You must have been worried?"

Joseph shifts in his seat.

"I was more cross than anything," he says. "It was ill mannered."

In 1986 they discovered Carole had moved to Macclesfield. She'd still send Christmas cards and ring occasionally, assuring them her career was going well. But by 1992 she had moved to London and changed her name from Carol Felstead to Carole Myers. They had to accept that Carole, for some reason, had chosen to stay away.

After her death they discovered Carole had become mentally ill. Her medical records revealed self-harm, alcohol abuse and stretches in psychiatric wards. She'd frequently been suicidal.

They felt shattered about the claims she'd made in her life assessment – and confused. She said she'd been abused by Joseph and his wife, who were the high priest and priestess of a satanic cult, and that during her teens she'd had six children – some fathered by Joseph – that she'd been forced to kill. She also said she had an implant in her eye that would explode if she spoke of the satanists, and that a friend she'd confided in was murdered in front of her.

Carole's charges were easily proven to be false. The sister, whose murder she'd apparently witnessed, actually died of heart problems two years before Carole was born. The house fire, too, predated Carole's birth. And yet, to the Felsteads' disbelief, it seemed the mental-health professionals rarely challenged these impossible horrors. Worse, they'd concluded that Carole's psychological problems came as a result of this fictitious abuse.

But the family is pointing the finger straight back at the clinicians. They believe the blame for Carole's psychological downfall lies with credulous, satanist-obsessed therapists who went along with her claims that she'd been sexually menaced. After all, they point out, it's happened before – most famously in Orkney in 1991, when nine children were forcibly removed from their homes following interviews by social workers led by an individual who was subsequently accused of being "fixated on finding satanic abuse".

I ask the Felsteads when the first mention of mental-health problems appear in Carole's medical records. In August 1985, it turns out, she received therapy for insomnia and nightmares related to "family abuse". Soon afterwards a 1986 letter mentions further "psycho-sexual counselling" by someone whose name sends a cold stun of recognition through me. It's her: the next of kin; the woman who baffled me by abruptly – perhaps defensively – announcing: "I'm not a therapist!" It's Dr Fisher.

Arriving back in London I'm in no doubt that Carole's abuse claims were untrue. But is it really possible, as the Felsteads insist, for a person to have memories "implanted" by a therapist? Professor Elizabeth Loftus, of the University of California, certainly believes so. In one famous study she sought to examine the process by which a therapist can generate a memory of an event simply by suggesting it. Loftus told 24 adults to write detailed descriptions of four childhood events supplied earlier on by a family member. Unbeknown to them, one of those events never actually happened.

But six participants – 25% of the group – remembered the false event. When asked to choose which memory was fiction, five got it wrong. "Since then," says Loftus, "I and many others have planted bizarre memories of accidents: animal attacks, nearly drowning, witnessing demonic possession. What we've found is absolutely stunning. False memories can be very detailed, and people can be very emotional about them. A lot of these therapists say: 'I believe she was abused because every time she talks about it she cries,' as if somehow the emotion is proof that it's true. It's not."

False memories don't even require a therapist. Any trusted source – a book, friend, TV personality – can suggest the possibility of abuse. Your mind might then produce a fragment – an image of something bad happening. What was that? You recall it again. You fill in the details. "Repetition makes it more vivid and familiar," explains Kimberley Wade, associate professor of psychology at Warwick University. "It'll start to feel like a memory."

Wade has generated false memories using doctored childhood photos. "On average 35% of our participants develop a rich memory of their fake event," she says. "They describe how it happened, where they were, how they were feeling."

In the journal Advances in Psychiatric Treatment I find a description of false memory syndrome, or FMS. Sufferers, it says, often make claims involving satanic abuse and are told to stay away from their family. FMS can take place as a result of "recovered memory therapy", an umbrella term for a witchbag of techniques, many involving dream interpretation and hypnotherapy, widely discredited in the 1990s.

The concept of repressed memories itself is, according to psychologist Chris French of the University of London, highly questionable. "There's a divide on this in psychology," he says. "But these 'recovery' methods are also used in the context of alien abduction accounts. If you're going to accept recovered memories of abuse, you should also accept the alien claims."

While chatting with French, I mention a psychotherapist who saw Carole called Valerie Sinason. Unexpectedly he lets out a guttural, melancholy groan.

"Oh Gooooodddd," he says.

If the Felsteads are right, Carole is likely to have had some form of recovered-memory therapy in the mid-80s – roughly the time her behaviour began to sour. But the only person I know who might be able to answer this question of whether she did is Dr Fisher. Since our last chat, she's vanished. She's changed her mobile number and has ignored several emails. Instead I arrange an interview with Valerie Sinason who, according to the records, saw Carole for psychotherapy biweekly for eight months in 1992. I want to know if she'll fit the description Professor Loftus gave of the therapists she's come across in legal cases who have involved false memory – that of a highly credulous believer in satanic abuse who has a tendency to believe ritual damage in patients.

Sinason arrives, in her north London counselling room, tanned and relaxed in a loose smock, dark leggings and trainers. There's a chaise longue with a crowd of teddies resting in its crook. On the floor, shoved beneath a table, a large cloth boy gazes sadly into space. We're joined by her husband David, who takes notes throughout our talk.

Sinason insists she doesn't use recovered-memory techniques. "I'm an analytic therapist," she says. "The idea of that is someone showing, through their behaviour, that all sorts of things might have happened to them." Signs that a patient has suffered satanically include flinching at green or purple objects, the colours of the high priest and priestess's robes. "And if someone shudders when they enter a room, you know it's not ordinary incest."

Another warning, she says, is the patient saying: "I don't know." "What they really mean is: 'I can't bear to say.'" A patient who "overpraises" their family is also suspicious. "The more insecure you are, the more you praise. 'Oh my family was wonderful! I can't remember any of it!'"

In the medical records, Sinason noted that Carole was her first chronic sadistic-abuse patient. Today, when I ask about her first patient, Sinason describes the arrival of two medical professionals – a nurse and a psychologist – one of whom was limping.

"I just had that nasty feeling," she says. "It's her, and she's been hurt by them."

"You could tell that from the limp?" I ask.

"Yep."

Soon, we get to the actual satanism. Sinason talks of a popular ritual in which a child is stitched inside the belly of a dying animal before being 'reborn to satan'. During other celebrations, "people eat faeces, menstrual blood, semen, urine. There's cannibalism." Some groups have doctors performing abortions. "They give the foetus to the mother and she's made to kill the baby."

"And the cannibalism – that's foetuses?" I clarify.

"Foetuses and bits of bodies."

"Raw or cooked?"

"The foetuses are raw."

"Not even a bit of salt and pepper?" I ask.

"Raw. And handed round like communion. On one major festival, the babies are barbecued. I can still remember one survivor saying how easy it is to pull apart the ribs on a baby. But adults are tougher to eat."

She describes large gatherings in woodlands and castles, with huge cloths being laid out. "That's normally when there's a sacrifice," she notes, "and because the rapes are happening all over the place. There's a small amount of cannon fodder in terms of runaways, drug addicts, prostitutes and tramps that are used. There's sex with animals. Horses, dogs, goats. Being hanged upside down. In the woods, on a tree."

"How do they get an animal to have sex with a human?" I wonder.

Sinason's husband thinks for a moment. "Well," he says, "plenty of dogs have a go at people's legs." "True," says Sinason, adding poignantly: "However horrible it sounds, the dog, at least, is friendly afterwards."

"Because at least the dog's had a good time," I say.

"And the child loves the pet," Sinason nods. "The pet is made to have sex with the child – but the pet, at least, is still their friend."

Having experienced the Sinasons' wild kaleidoscope of beliefs, it seems obvious to me that the Felsteads are right in suspecting that Carole's therapists had some dramatically unlikely views. But Sinason doesn't enter Carole's story until the early 1990s. Her abuse memories – at least the initial ones – cannot be blamed on her. I'm more determined than ever to ask Dr Fisher if Carole underwent recovered-memory therapy.

David Felstead emails me a home number for Fisher, but it goes to the answerphone of another family. When, out of desperation, I dial it a final time, someone picks up. To my astonishment, she says: "Yes, people call for Fleur Fisher sometimes. I'll give you her number."

Dr Fisher lives in Plymouth, and is a former head of ethics at the British Medical Association. She speaks with the all the authority that such a position suggests. Sometimes confident, sometimes wary, sometimes maudlin and resigned, she actually has good reason to fear the Felsteads. After discovering she'd taken Carole's possessions, they reported her to the GMC and the police. Neither found sufficient evidence to act against her.

Fisher admits she had no legal claim to be Carole's "next of kin", but denies the Felsteads' accusations that she stole her property. She emptied the flat, she says, because the property managers were demanding it. As she cleared up, she found the letter from Richard. "Honourably, I gave it to the police," she says. "Otherwise the family would never have known. Never, never, never!" The clearout happened on 7 July 2005, a date, of course, that became known as 7/7. The terrorist explosions crippled the public transport network, which is why she needed to take Carole's car to get home. It was soon returned to London.

I ask why she phoned Richard on the day the Felsteads were informed of the death. She did so, she says, because the coroner mentioned how crushed he'd sounded. "Concern for somebody else's distress sometimes overcomes you," she says. "I was foolish. Unwise."

Ironically, it was her discovery of Richard's letter that led to the funeral's cancellation. Was she upset when she heard it had been halted? "You can't even imagine," she says. "I just screamed and screamed."

Finally, we get to the question of whether Carole's memories of satanic abuse were recovered. Initially Fisher refuses to speak about Carole. "I have a duty of confidentiality, even after a patient has died. I was never her psychiatrist or psychotherapist or anything like that." She raises her voice. "I'm not a psychotherapist, for God's sake!"

"According to her medical notes, she saw you for counselling," I say.

"No."

"I have the letter here, dated 27 November 1986, that says: 'She required to see Dr Fisher for psychosexual counselling.'"

There's a silence. "Psychosexual is the wrong term," she says.

"What's the correct term?"

"Uh, I really don't know. People come and tell you things that have happened to them."

"Things like abuse?"

"Things that have happened to them," she repeats, crossly. "I'm not saying anything else. It's not right that this woman's privacy should be breached in this way." She's shouting now. "She's dead! She's goddamned dead!"

Was she ever worried that Carole had lapsed into fantasy? "Never," she says.

By 1997, I tell her, Carole was claiming a government minister had raped her with a claw hammer in Conservative Central Office. "That's not something I knew about," she says. "It may have been fantasy. I couldn't say. In general she was a common-sense woman."

"Are you aware of any evidence that any of Carole's claims actually happened?"

"I never looked for any evidence."

"Then what made you believe her?"

"She's not the only patient I've had who told the same kinds of stories."

"About ritual abuse?"

"It turned out to be that, yes. The people didn't remember at first. They weren't aware. They were memories they'd had a long time and they just came out."

And that, I decide, is as close as I'm going to get. Before I ring off, I ask Fisher what Carole was like. "She was a feisty, brave, intelligent woman. She was funny. A good laugh." And then, softly at first, she starts crying.

Finally, I seek advice from Dr Trevor Turner, a consultant psychiatrist at St Bartholomew's Hospital in London. A former vice president of the Royal College of Psychiatry, Turner is an expert in schizophrenia. I wanted to speak with Turner because I've heard that delusions and paranoias like the ones Carole suffered are a common facet of the condition. Turner confirms this, adding: "Another thing that's a part of the schizophrenic illness syndrome is the idea that your body has been interfered with," he tells me. Carole's slow withdrawal from the family, it turns out, is also typical. "If you're thinking things are being done to you, you blame those around you," he says. "Families of people who have got schizophrenia are commonly accused of things by the patient."

Assuming that Carole was suffering from schizophrenia, I wonder what effect it might have had on her, having therapists validate her darkest delusions. What would it be like for a paranoid psychotic to have it confirmed that, yes, there really are satanists out there, trying to get you? "Absolutely terrifying," he says. "It's highly likely it would make it worse."

A week later I ask Sinason if Carole was the patient she'd described, with the limp. She denies this and refuses to answer questions about her, citing confidentiality. Despite the medical records, she insists she never treated Carole, admitting only to having seen her as part of a study into ritual abuse for the Department of Health. I put it to her that telling a patient with paranoid delusions that her fears are real would be extremely dangerous. "It would cause real damage," she concedes, but denies doing this. "The purpose of therapy," she says, "is not to act as judge or jury."

On 21 June 2005, after years of silence, Carole unexpectedly phoned her brother Richard, saying she was lonely and wanted to move back to the family in Stockport. Just over a week later, she died. That same day, Richard wrote the letter discovered by Dr Fisher that triggered the family's search for truth. He recounted the latest news – about his business, his brothers, his dad's heart attack – and finished with a flourish that, in retrospect, seems haunting and prescient. "One shouldn't maintain too great a distance," he wrote, "as once the moment is gone, it is gone."

Find more information at justiceforcarol.com or bfms.org.uk