Retired Supreme Court justice John Major says in his report that a 'competent analyst' could have discerned that Air India Flight 182 was at high risk of being bombed. (Sean Kilpatrick/Canadian Press)

Canadian authorities should have known that Air India Flight 182 was a potential terrorist target, a long-awaited report says in blaming a "cascading series of errors" by government, the RCMP and the country's spy agency for failing to prevent the disaster.

In a scathing report released Thursday in Ottawa, former Supreme Court justice John Major says agencies were not prepared for the threat of terror attacks in 1985 — and holes in the country's security systems still need plugging.

Major's inquiry report into the bombings, which he refers to as the "worst mass murder in Canadian history," recommends sweeping changes to Canada's air security system.

Air India Flight 182 blew up over the Atlantic Ocean near Ireland on June 23, 1985, killing all 329 people aboard, 280 of them Canadians.

A separate luggage bomb destined for a second Air India flight killed two Japanese baggage handlers at Tokyo's Narita airport the same day.

The inquiry into the bombings — how they occurred, why authorities failed to find those responsible, and whether it could happen again — began on June 21, 2006.

"I stress this is a Canadian atrocity," Major said. "For too long the greatest loss of Canadian lives at the hands of terrorists has somehow been relegated outside the Canadian consciousness."

The final report sits on the table in front of John Major as he comments on the bombing of Air India Flight 182 during a news conference in Ottawa on Thursday. (Adrian Wyld/Canadian Press)

'Inexcusable' blunders

Major called the blunders committed by security agencies in the handling of threats against Air India "inexcusable."

In one of its key recommendations, Major's report calls for a powerful national security czar with direct access to the prime minister to sort out turf wars between the RCMP and CSIS.

The national security adviser currently has a much more diminished role than Major recommends. In an enhanced role, Major said the adviser would be the ultimate security authority.

The ramped-up powers would include overseeing communication between agencies and settling disputes; supervising agencies and controlling distribution of intelligence; and providing oversight to the government on the effectiveness of national security strategies.

Major also said terrorism prosecutions at the federal level should be handled by a director of terrorism prosecutions appointed by the attorney general of Canada.

He also recommends improvements to airport security monitoring, including more checks on cargo, ground crews, baggage handlers and mechanics.

'High risk' target

Major criticized government security agencies for their handling of information in the lead-up to the bombings.

The report says that the RCMP and CSIS were in possession of significant pieces of information "that, taken together, would have led a competent analyst to conclude that Flight 182 was at high risk of being bombed by known Sikh terrorists in June 1985."

Major called the arrangements and practices of Canada's information-gathering agencies "wholly deficient" in their sharing of intelligence both internally and externally, as well as their analysis of that intelligence.

Major called CSIS's surveillance in the case "ineffective." Agents were unable to distinguish one turbaned Sikh from another, the report says.

When a CSIS surveillance team observed a test explosion conducted by Sikh extremists in the woods near Duncan, B.C., in June 1985, the loud sound heard was misinterpreted as a gunshot.

Major's report is also critical of CSIS and RCMP actions after the bombing. He said CSIS often failed to disclose promptly to the RCMP information that was relevant to the criminal investigation, or it disclosed information without sufficient detail.

He also slammed the spy agency for erasing tapes of coded conversations and destroying notes on information from sources.

The RCMP was faulted for often prematurely failing to follow up on intelligence leads that did not fit with its main theory on the case.

"For example, one suspect was ruled out based on observations, made two years after the bombing, that his hair did not look like the hair of one of the individuals who had checked in the luggage, as depicted in an imprecise composite drawing," Major said.