The shadow home secretary, Andy Burnham, has called for G4S to be stripped of its contract to run children’s prisons after seven members of staff were suspended following abuse claims at a youth offenders institution. Burnham has also called for a wide-ranging review of all the company’s contracts within the criminal justice system to be led by the home secretary and justice secretary.

An investigation by BBC’s Panorama, to be aired on Monday evening, features footage taken by an undercover reporter working as a guard at Medway secure training centre (STC), Kent, which holds children aged between 12 and 18. The Panorama reporter witnessed scenes of children being assaulted by guards and using restraint techniques unnecessarily. In one instance, a child tells staff who are squeezing his windpipe that he cannot breathe.

“What shocks me is that we’ve heard these things time and again, and every time we’ve had bland assurance from G4S it won’t happen again and yet it just carries on the same,” Burnham told the Guardian.

Medway secure training centre run by G4S in Rochester, Kent, is now subject to an inquiry following allegations of abuse and mistreatment of youngsters. Photograph: Gareth Fuller/PA

In 2004, 15 year-old Gareth Myatt died after being restrained by three adult guards at Rainsbrook STC, operated by G4S, the world’s largest security firm. The teenager, who who was 4ft 10in tall and weighed six-and-a-half stone, was restrained after complaining that he had wrongly been locked in his room as a punishment for failing to clean a sandwich toaster that he said other children had used.

G4S currently runs England’s three STCs – Medway, Oakhill in Milton Keynes and Rainsbrook in Northamptonshire. Following a damning inspection report on Rainsbrook last year, the contract to run Rainsbrook was taken away from G4S in September, although the company is in place until May this year when MTCNovo will take over. The Youth Justice Board also announced in September that G4S had won the contract to operate Medway STC for another five years. G4S said it could win only one of the two STCs under the procurement process.

The inspection at Rainsbrook found children had been subjected to degrading treatment and racist comments from staff. Inspectors said some staff took drugs while on duty, colluded with detainees and behaved “extremely inappropriately” with young people, causing distress and humiliation. Six members of staff were dismissed.

In 2014, following a Guardian investigation, 14 children who had been unlawfully restrained in STCs run by G4S and Serco were awarded damages amounting to £100,000. Neither company admitted liability, but paid two thirds of the damages. The remaining third was paid by the YJB.

On Friday, G4S announced that seven members of staff at Medway had been suspended following the allegations made by Panorama.

Burnham told the Guardian: “This is first and foremost a matter for Kent police, although it is incumbent on the home secretary to ensure that they have all support and resources they need to cary out. Given that this looks like institutional failure on behalf of G4s, it needs to be a far reaching investigation that doesn’t just concentrate on the individuals concerned but also looks at what was done by those in managerial positions.

“But more broadly it raises very serious questions for the government to answer. If these allegations prove to be true, then an immediate arrangement must be made for G4S to be stripped of this contract ... Given that this company in particular has been drinking in the last-chance saloon when it comes to government contracts, this feels like a failure too far..”

Paul Cook, the managing director for G4S children’s services, said: “We are treating the allegations with the utmost gravity and have taken immediate action to suspend a number of staff members who are alleged to have conducted themselves in a manner which is not in line with our standards.

“We take any allegations of unacceptable or inappropriate behaviour extremely seriously and are giving our full support and cooperation to the local authority designated officer for safeguarding children and the police as the investigation moves forward.”

The YJB said no more children would be sent to Medway while the investigation was ongoing.