Children in the care of Lambeth Council were subjected to "levels of cruelty and sexual abuse that are hard to comprehend", an inquiry into historical child abuse has found.
The Independent Inquiry into Child Sexual Abuse's report said the council exposed children to situations where they were at risk of sexual abuse and knowingly kept staff who were a threat to children.
The inquiry looked at five children's homes: Shirley Oaks, Angell Road, South Vale Assessment Centre, Ivy House and Monkton Street.
It found that by June 2020, Lambeth Council had received complaints from 705 former residents at three of the homes, but only one senior employee had been disciplined in over 40 years.
One of the council's biggest care homes, Shirley Oaks, received allegations of abuse against 177 staff members or people linked to the home. Up to 350 children lived at the home in Croydon until its closure in 1983.
The report described Shirley Oaks and South Vale homes as "brutal places where violence and sexual assault were allowed to flourish".
At Angell Road, children - including those under the age of five - were systematically exposed to sexual abuse, the inquiry found. It said that the true scale of the sexual abuse against children will never be known, but is certain to be significantly higher than has been formally recorded.
The inquiry is also calling for a criminal investigation to be considered into the handling of the case of a child who died in care.
It found that after a resident was found dead in the bathroom at Shirley Oaks in 1977, Lambeth Council failed to inform the coroner that the resident had alleged he was sexually abused by his "house father" at the home.
The inquiry is recommending the Metropolitan Police consider whether there are grounds for a criminal investigation in this case.
The report findings are based on 19 days of public hearings held last summer. It is one of three investigations by the inquiry into the response by local authorities to allegations of child sexual abuse, alongside Rochdale and Nottinghamshire.
The report makes four recommendations, including vetting checks for current foster carers, and mandatory training on safeguarding for elected councillors.
Lambeth Council has accepted that it failed children in its care, and apologised to the inquiry.
Leader of the council, councillor Claire Holland, said in a statement: "On behalf of all elected members and staff, Lambeth Council wishes to re-state our sincere and heartfelt apology to all victims and survivors of abuse and neglect while in Lambeth's care.
"The council was responsible for their care and protection but failed, with profound consequences. The council is deeply sorry for their experiences."
She said the report sets out that the "council of the past failed to protect many of its most vulnerable children" and "a disproportionate number of those children were from Black, Asian and Multi-Ethnic backgrounds."
"The extent and scale of the horrendous abuse, which took place over many decades, remains deeply shocking", she added.
Cllr Holland also said the report asked the council to develop an action plan to deliver improvements, which it already has in place, and it will now be reviewed.
She added: "While accepting the clear and inexcusable failings of the council over decades, a clear distinction must be drawn between the council of the past with the Lambeth of today.
"The fact that the report acknowledges this is welcome - but we know we have much, much more to do. Lambeth Council is determined that such widespread failure should never be repeated and have been working extremely hard to make sure that our governance, systems, processes, training, culture and corporate learning deliver this commitment."
The Met Police's Alex Murray said victims and families had "waited years" for the report and expressed his hope its publication "brings some answers".
"It is clear that at different times we missed opportunities to identify offenders and investigate further," he added.
"Some of the treatment of children was also unacceptable. We are sorry for when we let children in the care of Lambeth down.
"As the report notes, we have changed the way we investigate allegations of child sexual abuse, with better training for officers, greater collaboration between social care partners, and putting the victim at the heart of the investigation.
"We are building a culture of professional curiosity within the Met to ensure any officer with concerns about a child acts promptly and appropriately.
"We will ensure that any learning for the Met will be taken forward.
"We have received the recommendation by IICSA namely 'the death of LA‑A2 whether the Met should consider whether there are grounds for a criminal investigation into Lambeth Council's actions when providing information to the coroner about the circumstances surrounding LA‑A2's death', which we will now assess.
"We encourage anyone who has been the victim of child sex abuse to come forward and speak with us."