The inquiry said that Andrew Holton, a "caring, supportive and dedicated" consultant at Leicester royal infirmary, got 31.8% of his epilepsy diagnoses wrong.

But the doctor escaped disciplinary action after evidence from the British Paediatric Neurology Association that this rate of epilepsy misdiagnosis by generalist paediatricians was "not unusual".

Richard Newton, the association's president, said the vast majority of children were diagnosed by generalists who could be expected to get nearly a third of these cases wrong. Mistakes would not come to the attention of one of Britain's 63 specialist paediatric neurologists until the children failed to respond to epilepsy treatment.

Dr Newton appealed last night for action by the government to double the number of specialists and fund a national manager to set up a national epilepsy treatment network.

The report by the University Hospitals of Leicester NHS Trust found that Dr Holton wrongly prescribed anti-epilepsy drugs to children suffering from migraine, tics, and night terrors.

They included steroids and Vigatrabin, a drug that is known to cause tunnel vision, and there was "continued debate" about whether they suffered long-term harm.

Dr Holton was suspended in May 2001 pending the investigation. He will not be allowed to work again as a paediatrician, and he intends to retrain in another specialty outside Leicestershire.

However his case is still being considered by the General Medical Council.

Peter Reading, chief executive of the trust, offered "an unreserved apology to patients, carers and children for any distress and anxiety whilst waiting for their case to be investigated or for any distress that a subsequent change in diagnosis may have caused".

Allan Cole, the medical director, said: "The trust accepts that during Dr Halton's time at the Leicester royal infirmary in the 1990s he received little supervision as a single-handed practitioner to ensure that he did not exceed his expertise."

Dr Newton said that the difference between Dr Holton and other generalist paediatricians had been his reluctance to question his initial diagnoses. Epilepsy was peculiarly hard to diagnose: symptoms could be confused with daydreaming, migraine, or fainting.

The only comparable studies of misdiagnosis were conducted during the past two years in Copenhagen and Sarajevo, where misdiagnosis rates of 39% and 38% were recorded by generalist paediatricians.

In Leicester, parents of children wrongly diagnosed as epileptic said that it was a scandal which required a government inquiry.

Adrian Stevenson, chairman of the parents' support group, said: "We are pleased so many children have now escaped from a life clouded by the fog of medication.

"A small number were treated appropriately, but most were not. It is difficult for those of you not involved to understand exactly how much these events have affected the families."

The report was "written to conceal and to confuse. It is sparse on facts but rich in opinion".

Parents were concerned that 52 of the children died, but the trust denied any link with the medication prescribed.

"We believe that only through an open, independent statutory inquiry will parents get the truth in this case," Mr Stevenson said.