The Independent Police Complaints Commission's report on the shooting of Jean Charles de Menezes also criticized London Police Chief Ian Blair for attempting to block its investigation. Blair, buffeted by calls for his resignation, vowed to carry on.
De Menezes was killed when police hunting a terrorist stormed the subway train he was riding on July 22, 2005, a day after a botched attack by would-be suicide bombers and two weeks after a different group of bombers blew themselves up on London's transit system, killing 52 people. Police pinned de Menezes to his seat and shot him seven times at close range.
London's Metropolitan Police force was convicted a week ago of violating health and safety regulations during the anti-terrorist operation that led to the shooting. At the trial, a lawyer for the police suggested that de Menezes had behaved suspiciously, and it was suggested he may have been a drug user.
Nick Hardwick, chairman of the Independent Police Complaints Commission, said there must be no attempt to blame de Menezes for his fate.
"He did nothing out of the ordinary," Hardwick said.
"He hurried down the final few steps of the escalator when he heard a train was already on the platform. And like other passengers he got to his feet when police officers burst on to the train," Hardwick said.
"These actions may have been misinterpreted by police officers hunting a suicide bomber, but they were entirely innocent."
The report said police suffered from a communication breakdown.
"Failures of communication occurred in a number of ways: at the briefings of firearms officers; between the surveillance team and both the control room and firearms teams; the firearms and surveillance teams were not used to working together; the officers in the control room whose job it was to monitor the surveillance complained about the noise and confusion in the room," Hardwick said.
"There was a lack of clarity in the command to 'stop' Jean Charles de Menezes entering the underground (rail) system. Police radios did not work underground.
"These failing need to be addressed through organizational, training and technical changes."
Noting that officers involved in de Menezes' death had time to confer before giving statements, the commission said police involved in incidents should be treated the same as any other witness.
The IPCC report criticized Blair for attempting to prevent the commission from investigating the incident, a move which delayed the start of the commission's work for five weeks. Blair has been under fire since his force's conviction, and on Wednesday London officials voted that they had no confidence in him. But Blair, who insists he has no intention of resigning, has been strongly backed by Prime Minister Gordon Brown's government and the mayor of London.
Hardwick said Blair's position was not a matter for the commission.
He noted that the shooting had been the catalyst for significant improvements in the way police dealt with the threat of suicide terror.
"Those improvements make it less likely that there will be other innocent victims of police shootings but ... much more likely that the police will be able to respond effectively to an actual terrorist threat. London and Londoners should be safer as a result," Hardwick said.
"It should not have taken the death of an innocent man to achieve that."
De Menezes' family has said the report would only be meaningful if it led to concrete action. A lawyer for the family said the relatives might try to take their concerns to the European Court of Human Rights over "fundamental issues" about the accountability of police officers who kill people.
"The family remain determined to uncover the whole truth surrounding the tragic shooting and, where evidence allows, hold those officers individually accountable," attorney Harriet Wristrich told a news conference.