Crewe Alexandra, the club most heavily implicated in the Barry Bennell case, were warned he had sexually abused one of his junior footballers but allowed the man who turned out to be a serial paedophile to stay at the club for a number of years, the Guardian has been told.

Bennell was the subject of a top-level meeting in the late 1980s but was kept in his job despite the chairman at the time, Norman Rowlinson, recommending at one point that the club “get him out” because of growing suspicions about his behaviour.

Hamilton Smith, who was on the board from 1986 to early 1990, has told this newspaper he was so concerned at the time he asked for specially convened talks about concerns over Bennell’s relationship with young boys at the club and, specifically, to inform his colleagues that someone had marched over to him at a junior football match to allege that a friend’s son had been abused.

Smith recalls that the talks were held at Rowlinson’s house and the chairman was so disturbed by what he heard he suggested, at first, that the vice-chairman, John Bowler, should instruct the manager, Dario Gradi, to find a new youth-team coach, before an agreement was eventually reached that Bennell should be kept on but not left alone with boys and stopped from arranging overnight stays.

Gradi, according to Smith, was not present but he was there the next day at a follow-up meeting, attended by two other directors, in the manager’s office and made it clear he did not have any problem with Bennell – something he repeated in the 1996 Dispatches documentary when he said there was never “any cause for concern” about boys staying with the youth-team coach.

Bennell was finally arrested in Florida in 1992 after taking another junior team on tour and Smith has told the Guardian he believes it would be wrong for Crewe to say they were not warned about, and did not discuss at length, a man the American authorities later described as having “almost an insatiable appetite” for young boys.

“I’m incredibly angry the club continue to refute that they knew anything about suspicions of Bennell’s activities,” he said. “This was discussed at the club’s top level and, as much as I tried to resolve this, regrettably I couldn’t. I dread to think how many victims there are, and my heart goes out to them.”

Smith, described by Andy Woodward, one of Bennell’s victims, as “one of the people at Crewe who can hold their head high,” left the club shortly afterwards because of seriously deteriorating health but has been following the Bennell story with growing dismay. “Whatever I have been through is nothing compared what those poor boys went through,” he said.

Barry Bennell in Manchester City kit in 1983

Some of his fellow directors, he said, had argued it was difficult to condemn Bennell on the word of a member of the public who had not passed on his details or lodged an official complaint. Smith, however, says he was already uneasy because he had heard a member of staff expressing concerns about Bennell’s relationship with young boys.

Smith was also troubled by the amount of rumour and innuendo within Crewe and the surrounding area and in the same discussions – not an official, minuted board meeting – he says he explained to Rowlinson what he had heard. Rowlinson, who had been chairman since 1964, asked for clarification about the precise nature of what was being alleged.

After leaving the club, Smith was still so concerned about the set-up at Crewe he says he spoke about it on several occasions with Gwyneth Dunwoody, then the Crewe MP. In April 2001, he says he arranged to meet Tony Pickerin, the FA’s head of education and child protection, at Lilleshall and requested a wide-reaching investigation into the care of children at Gresty Road as well as asking about possible compensation for Bennell’s abuse victims.

Three months later, having not had a response, he contacted the FA, believing the delay meant a long, complex inquiry must be under way. After requesting an update a three-line letter, seen by the Guardian, arrived in the next few days from Pickerin saying the FA had “investigated the issues and is satisfied that there is no case to answer.”

Smith said: “My first thought was: ‘Well, what have you investigated, and who have you investigated?’”

Rowlinson, who died in 2006 aged 83, became sufficiently concerned about Bennell, a man he described as a “Pied Piper figure” with “a magnetic attraction with boys”, he contacted Manchester City, where they, too, had received a complaint about Bennell bringing boys into his room late at night.

Bennell, who has served three prison sentences, totalling 15 years, since 1994 for multiple offences committed against boys, had previously worked with junior teams affiliated to City, including Whitehill FC, where he targeted the 11-year-old David White, a future England international.

The complaint to City came from a parent but Ken Barnes, the club’s former head scout, told Dispatches the incident was “something of nothing” and nothing more than a “bit irresponsible”. Chris Muir, one of the club’s directors, told the same documentary that Bennell was “looked upon as a fellow that wasn’t right”, adding that “football allowed him to stay because he was producing the goods.”

Crewe have declined to comment. The FA, meanwhile, has said it is treating all the stories surrounding the entire case with utmost seriousness, citing the comments of the chairman, Greg Clarke, earlier in the week. City stated on Thursday they were “undertaking a thorough investigation of any past links he (Bennell) might have had with the organisation.”

• The NSPCC’s hotline is 0800 023 2642 and ChildLine for children and young people can be contacted on 0800 1111.

• The National Association for People Abused in Childhood can be contacted on 0808 801 0331.

• In the UK, Samaritans can be contacted on 116 123. In the US, the National Suicide Prevention Hotline is 1-800-273-8255. In Australia, the crisis support service Lifeline is on 13 11 14.