Former Met assistant commissioner John Yates should have arranged for a different officer to lead a review into the original phone hacking investigation, because of his links with the News of the World, the Leveson Inquiry has found.
Lord Justice Leveson said a "series of poor decisions, poorly executed" had contributed to the idea that closeness between the Met Police and News International made officers reluctant to fully investigate hacking. But he said he had seen no reason to doubt the integrity of the police and senior officers concerned.
Police launched the original phone hacking investigation, dubbed Operation Caryatid, after members of the royal household contacted them with concerns that their voicemails were being hacked by the News of the World in December 2005.
The newspaper's former royal reporter Clive Goodman and private investigator Glenn Mulcaire were both jailed in 2007 for hacking. But police later fell under fire for failing to widen the scope of the investigation despite evidence suggesting there would be many more victims.
Mr Yates, former assistant commissioner at the Met Police, was said to have decided in a matter of hours that there was no fresh material that could lead to convictions. He resigned in July 2011 over criticism of his review two years previously.
Commenting on the general relationship between the press and the police - an area tackled by the inquiry - the report said there needed to be a "constructive tension and absolutely not a self-serving cosiness". The Leveson Inquiry chairman said he had not found any extensive evidence of police corruption, and the scale of the problem of "leaks" should be kept in proportion.
The inquiry heard evidence suggesting close relationships between journalists and police officers - including the loan of a horse by the Metropolitan Police (MPS) to former News International chief executive Rebekah Brooks, and meals and drinks between other media figures and police.
But Lord Justice Leveson said this should also be put in its proper context, saying: "No one could reasonably conclude that inappropriately lavish entertainment is or has been rife in the MPS, or that the officers involved in what may be described as the most damaging evidence were corrupt. The issue is about perception, more than integrity."
The report said that "serious consideration" should be given to putting a 12-month "cooling off" period into contracts that would stop former senior police officers being employed by the press.
Lord Justice Leveson recommended that "off-the-record" briefings by police to journalists should be discontinued. He said Acpo rank officers should record all contact with the media, and that record should be available publicly. The report also recommended that police should re-examine the auditing of access to the Police National Computer.
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