Doctor Foster Intelligence has admitted that a £47,000 report it prepared for a London council was seriously flawed, following an investigation by the information company's own ethics committee.

The report was commissioned to aid a neighbourhood renewal scheme in the deprived wards of Waltham Forest, east London, to help identify specific health needs of that population. It was presented to the council in early 2007, but Nick Tiratsoo, vice-chair of a local community council and a London School of Economics professor, condemned it as "deeply flawed".

The report was referred to Dr Foster's internal ethics committee, which last month concluded that the report had failed to properly source and check data, did not explain the methodology used and contained editorial errors.

The committee said this breached the company's code of conduct, which demands that it "take care not to publish inaccurate, misleading or distorted material" or "material that is unfair or statistically unsound".

Dr Foster stated: "We accept the findings of the ethics committee and are now correcting the errors and omissions identified in the committee's investigation. We are also strengthening our quality assurance systems to [avoid] such errors."

A Waltham Forest council spokeswoman said: "We have stringent safeguards in place to ensure all contractors deliver what is expected of them.

"In this case there is an ongoing investigation and it would be inappropriate to comment further."

She added: "The report into our internal investigation is expected to be completed in February."