The man who killed a Brighton barman was allowed to leave an open prisin to murder again, a decision branded a "catastrophic failure" by the chief inspector of prisons.

Ian McLoughlin was jailed for the brutal murder of 56-year-old barman Peter Halls in September 1990.

Mr Halls, who ran The Volks Tavern in Madeira Drive, The Eastern in Eastern Road, and the American Bar of the Norfolk Resort Hotel in King’s Road, was found dead in his flat in Sillwood Road, Brighton, after being stabbed three times in the neck.

McLoughlin, who had been offered work at one of Mr Halls’ pubs, said he assumed the bar owner was gay and thought that he might be expected to sleep with him.

He was also jailed for eight years for the manslaughter of a man in North London after beating him to death with a hammer and stashing his body in a cupboard in 1984.

McLoughlin was on day release from his minimum term 25-year sentence when he stabbed to death 66-year-old Graham Buck as he came to the aid of a neighbour who was being attacked by McLoughlin.

McLoughlin had travelled to the home of former prisoner and convicted sex offender Francis Cory-Wright in Hertfordshire in July 2013, and filled a pillowcase with cash and family heirlooms in a robbery.

Mr Buck heard his neighbour's screams and went to investigate what was happening, but was dragged inside by McLoughlin, who slashed his throat.

In a report drawn up in January last year but made public today, Nick Hardwick, the chief inspector of prisons, highlighted a catalogue of failings that allowed McLoughlin to be released.

He said: "The decision to release Ian McLoughlin had catastrophic consequences."

In a highly critical report, Mr Hardwick warned that the system for identifying and managing prisoners released on temporary licence (ROTL) are woefully inadequate.

The number of times prisoners serving indeterminate sentences, which are handed out to the most dangerous convicts, have been allowed out on day release has increased from 38,000 to more than 90,000 between 2008 and 2012.

But Mr Harding said the systems for managing these offenders in open prisons "lack clarity and are insufficiently robust".

He added: "There is a general presumption in favour of granting ROTL. The purpose of individual releases is not clear, and there are insufficient safeguards to manage the risks presented by some higher-risk-of-harm prisoners."

He said protection arrangements "are not routinely reviewed when prisoners transfer to open prisons" and "risk assessment processes are inadequate".

A lack of competence and failures to share information are leading to "indefensible releases", he added.

McLoughlin had a history of violent attacks towards men he suspected of paedophilia and had failed to return to prison after being allowed out on day release before.

But despite these warning signs, poor leadership and a failure to properly assess the risk he posed meant officials waved through his day release in July 2013.

The convicted killer failed to return to HMP Springhill while released for the day in December 2010. He went out drinking all day and returned to a man's house where he was found by police called out to reports of two men having a row.

McLoughlin was arrested, but not charged, for being drunk and disorderly and returned to a closed prison.

Yet the following year the Parole Board recommended he was returned to an open prison.

Mr Hardwick warned that officials had failed to appreciate McLoughlin's dangerous "pattern of drinking, identifying single male targets who he believed to be paedophiles and/or homosexuals, returning to their houses, getting involved in an altercation and attacking them".

Despite these worrying signs, McLoughlin was sent back to an open prison in March 2013.

But his multi-agency public protection arrangements (MAPPA) were not properly reviewed on his return, and his new offender manager did not even see him before he was cleared for day release, the report found.

Mr Hardwick concluded: "It was not appropriate to release Mr McLoughlin for the first time since his previous failure in 2011 for such a lengthy, unaccompanied, unstructured and unmonitored ROTL.

"Mr McLoughlin's custodial behaviour was good and the prison had no security intelligence or concerns about his conduct. However, he presented a concerning risk profile.

"He had previously been convicted of manslaughter and had committed at least one murder. He had failed open conditions twice before. This was his first opportunity to be released on temporary licence since his ROTL failure in 2011. The risks he presented on ROTL were not sufficiently assessed or managed."