Brighton and Sussex University Hospitals trust suspended twice the national average of orthopaedic patients, often as they were coming up to the nine-month maximum wait.
The suspensions were uncovered during a visit by the Department of Health's national orthopaedics project in summer 2004. The trust then found that 234 patients waiting longer than nine months - 180 in orthopaedics - had not been included in official statistics.
It then commissioned an investigation by the Audit Commission which concluded that a total of 843 suspended 'long-waiters', 437 were inappropriate. The patients were all treated by September 2004.
Last week Surrey and Sussex strategic health authority received the results of a further review, commissioned from former NHS North West director Professor Robert Tinston and former NHS manager Derek Mechen, which examined how the practice came about.
The review concludes that 'some members of the executive team must have known about this practice and should have been more proactive in stopping it', although it says there was no attempt by senior managers to mislead.
The report is also critical of the local delivery plan which set out an unrealistic workload for the trust in orthopaedics and lacked credibility. 'All sections of the local health community, comprising the SHA, the three primary care trusts and BSUH must accept some responsibility for what has happened,' it says.
But it is also critical of the then culture within the trust which it describes as 'generally unforgiving and also one where managers neither sought out nor wanted to hear bad news' and where clinicians and senior managers 'largely worked in isolation'. There were no plans to meet national targets such as six-month waiting or choice.
'Although managers knew there was a lack of capacity, no-one in a managerial position wanted to delve too deeply for fear of uncovering a problem they would not be able to solve.'
The report calls for more devolution of power within the trust with a strengthening of the role of middle managers, staff to be set realistic objectives, and more rigour in the LDP process.
Peter Coles, appointed chief executive last September, said many of the areas highlighted in the report had already been acted on, but that there were lessons to learn about capacity planning.