Footage given exclusively to Sky News shows staff at a UK abattoir punching pigs and burning them with cigarettes.
Animal Aid secretly installed four cameras inside Elmkirk (Cheale Meats) Ltd , an Essex slaughterhouse that claims to uphold high standards of animal welfare.
The pictures show pigs hit in the face with bats, incorrectly stunned and dragged by their ears to slaughter.
The campaign group claims the footage shows widespread breaches of animal welfare law and is demanding the Government takes legal action.
But the Department for the Environment and Rural Affairs (Defra) has announced it will not prosecute Cheale Meats, in Brentwood, because campaigners trespassed to obtain the footage.
Defra lawyers cited two previous cases of animal cruelty which collapsed after similar footage was ruled inadmissible in court.
But Sky News has found examples of successful court cases which relied on footage obtained by trespassing campaign groups or activists filming undercover.
In 1998, Steve Gills was convicted of beating elephants with an iron bar after he was secretly filmed at Mary Chipperfield's Circus.
In 2006, workers at a Bernard Matthews farm in Norfolk were convicted of cruelty after they were caught-on-camera hitting turkeys with metal poles .
The RSPB also claims to have secured more than twenty prosecutions after hiding cameras on private land to catch gamekeepers persecuting birds-of-prey.
Animal Aid believes the decision not to prosecute Cheale Meats is political.
Kate Fowler, the organisation's head of campaigns, said similar cases covertly filmed by the group were dropped after there was a change of government.
"Defra were bringing case after case and one even got to court.
"Then literally within four weeks of the new government coming in, all these cases were dropped.
"Animal Welfare Minister Jim Paice is also the minister for hunting and shooting. He's done everything he can to avoid banning wild animals in circuses, he's overturned the ban on pheasant cages and he's reduced veterinary cover at livestock markets."
A Defra spokesperson was unavailable for interview but issued the following statement: "Where video evidence has been obtained unlawfully through trespass, there is very little prospect of securing a conviction.
"As the RSPCA has also found in previous cases, trials which are thrown out of court do absolutely nothing to help reduce the suffering of animals.
"Because the only evidence available against Cheale Meats was video footage obtained unlawfully through trespass, the Food Standards Agency took into account the other cases, and did not send the footage to Defra, or ask it to consider a prosecution."
The RSPCA says a solution is for independently monitored CCTV to be installed in abattoirs. RSPCA prosecutor, Sally Case, said: "Not only would CCTV act as a deterrent, it would also provide proper, admissible evidence of any offending."
It is a move that has the backing of UK supermarkets including Sainsbury's, Morrisons, Marks & Spencer, Waitrose and the Co-op.
Sainsbury's said many of its meat suppliers had already installed CCTV cameras and expected all their abattoirs to be monitored by the end of 2011.
Jamie Foster, solicitor for Elmkirk, said the footage had been obtained unlawfully and his client has had CCTV installed for ten years.
"Given the source of this material, Elmkirk would not accept that all or any of the activities shown on this video relate to their premises.
"A complaint has been made to Essex Police by our clients in relation to any unlawful entry into our client's premises by an employee of Animal Aid. The outcome of that complaint is awaited."
The Food Standards Agency says it has revoked the licence of one slaughterman in the footage and increased the level of monitoring at the plant.