The suppression of a report criticising the Care Quality Commission’s regulatory oversight of scandal-hit University Hospitals of Morecambe Bay may well have constituted a deliberate cover up by senior management at the regulator, an independent investigation has concluded.

The author of the internal report told investigators from advisory firm Grant Thornton that he had been instructed to “delete” it by a senior manager at the care quality regulator in March 2012.

Grant Thornton’s own investigation report – published this morning – concludes that this alleged instruction “might well have constituted a deliberate ‘cover up’”.

In April 2010, Morecambe Bay was registered with the CQC without compliance conditions. Later that year it was granted foundation trust status, partly based on the assurances CQC had provided to foundation trust regulator Monitor about the trust’s maternity services.

The following July, CQC sent inspectors back into Morecambe Bay, and discovered “major concerns” about the trust’s Furness General Hospital maternity unit. Closer attention from the two regulators subsequently uncovered a major care and governance scandal at the north-western foundation trust.

The Grant Thornton investigation found that in October 2011 a “senior CQC individual” commissioned a senior manager to conduct an internal review of its “regulatory decisions and activity at UHMB”.

The investigation report states: “We only became aware of this review during our investigation when we were informed by a member of the regional team.

“We followed up by interviewing the individual who undertook the review. He informed us that at a meeting in March 2012… he was instructed by a member of senior management at the CQC to ‘delete’ the report of his findings.”

It adds: “The individual claimed what laid behind the instruction to delete his report was a sense that it contained findings that were potentially damaging to CQC’s reputation.”

When the investigators “eventually” obtained a copy of the report they found it contained a slew of criticisms of the CQC, referencing an “over-reliance” on assurances from the trust, “insufficient” validation of information, and a registration process for UHMB that was “inadequate in terms of identifying potential risk indicators”.

The investigators note that the “senior member of management” concerned has denied ordering that the report be deleted. However, they conclude that there is corroborative evidence to support the allegation “in the form of a contemporaneous note of the meeting and the lack of action taken on the information included in the report”.

The investigation report continues: “We were also surprised that the fact that such a review took place was not shared with us during briefings we held with the senior member of management, who allegedly gave the instruction to delete the report, ahead of the commencement of our work.

“We have given careful consideration to whether the alleged instruction to delete this report could in effect constitute a deliberate ‘cover-up’ and if so what would be the reason for doing so? We have concluded on balance the evidence… suggests it might well have constituted a deliberate ‘cover up’.”

The Grant Thornton investigation was commissioned by David Behan after he took over as CQC chief executive last summer.

A CQC spokesman last night said the regulator’s culture was now changing. “We let people down, and we apologise for that,” he said.

“This [Grant Thornton] report reveals just how poor the CQC oversight of University Hospitals Morecambe Bay was in 2010.

“This is not the way things should have happened. It is not the way things will happen in the future. We will use the report to inform the changes we are making to improve the way we work and the way we are run.

“There is no evidence of a systematic cover-up or of any collusion between CQC and the Public Health Service Ombudsman, but the example of how an internal report was dealt with is evidence of a failure of leadership within CQC and a dysfunctional relationship between the executive and the board.

“There is evidence of a defensive, reactive and insular culture that resulted in behaviour that should never have happened.”

Health secretary Jeremy Hunt was expected to make a statement about the report’s findings in the Commons this afternoon.