A nursery worker who raped a toddler had a 'special relationship' with the girl which, though it had caused concern amongst other staff, was not properly investigated by either Ofsted or local council staff.
A serious case review found Birmingham City Council and Ofsted inspectors had missed 'obvious pointers' that could have raised the alarm about Paul Wilson, 21, who was jailed for life in 2011.
Wilson was arrested after police investigating the attempted online grooming of a 13-year-old girl examined his computer, on which they discovered footage he had filmed of himself raping the toddler at the Little Stars nursery in Birmingham, where he had worked for 18 months.
He was ordered to serve a minimum of 15 years, later reduced in February 2012 to 13 years and six months, after admitting the rape and the online abuse of 22 girls aged between 12 and 15 and more than 40 offences.
Wilson, whose mother had previously been a manager at the nursery though not at the time of the attacks, had abused the toddler on at least two occasions.
Ofsted had received an anonymous complaint from a staff member about Wilson's behaviour towards the girl, who was from a vulnerable background. It included him cuddling the child, rocking her for hours at a time, wrapping her in a blanket and refusing to leave her. He also spent time with her to the exclusion of others.
Ofsted did not speak to Wilson but it did approach the nursery manager, who believed the allegations were an issue of professional practice rather than child protection. The nursery was given a 'notice to improve', and a subsequent Ofsted inspection graded the nursery as 'good'.
Ofsted said it "very much" regretted its inspection regime in 2010 did not help to stop him sooner, but stated it had "long since strengthened" inspection and investigation practices and would "carefully study" the report.
The review also highlighted an incident, logged by the nursery, when the child was heard to scream "I want my mummy" while alone with Wilson in the sleep area. There was no evidence of any action taken by the nursery at the time, the review stated.
Other concerns about Wilson's behaviour were attributed by the nursery manager to 'bitchy' members of staff, said the report.
The review, carried out by Birmingham's safeguarding children board, said the lack of rigour and depth in inspection processes had supported Wilson's offences.
Among other failings and weaknesses identified were a lack of supervision, poor management within the nursery, and its layout.
Jane Held, the chair of the safeguarding children board, said: "Responsibility for this awful abuse must, and does, lie with the perpetrator. He was clever, duplicitous and manipulative and took advantage of weaknesses in the system.
"In this case there were unfortunately a number of weaknesses in the way that nursery was run and a number of opportunities to intervene earlier and prevent the continuation of abuse which were missed," she said.
"There are three key lessons arising from this review. One is that those in charge of settings caring for children must ensure there are strong, clear practices and systems to minimise the risk of abuse.
"The second is to listen to and ask about children's experiences rather than just speak to adults.
"The third, and potentially the most important, is that safeguarding children is a job for everyone, and every single person who looks after or cares for children needs to know how to recognise when something is not right and what to do about it, and have confidence they will get the right response when they do act."
As well as making eight key recommendations, the review established that the local authority did not communicate with relevant agencies and investigate initial child protection concerns.
"It was entirely fortuitous that the offending came to light via a route other than robust responses to concerns within the nursery," the review states.
The report's author, Jane Wonnacott, said: "In this case there were obvious pointers that should have raised the alarm, yet both Ofsted and the local authority failed to recognise them and respond appropriately in a co-ordinated manner."