OTTAWA - The bomb blast that shattered the lives of 329 men, women and children aboard Air India Flight 182 could have been prevented but for a "cascading series of errors" by police, intelligence officers and air safety regulators.

That's the sobering conclusion of retired Supreme Court justice John Major, who spent nearly four years leading a public inquiry into the 1985 terrorist attack that killed a planeload of Canadian and Indian citizens over the Irish Sea.

His damning report says the RCMP, Canadian Security Intelligence Service and Transport Canada failed to heed warning signs that the airline was likely to come under attack.

And it notes there are still holes in the country's security systems that need plugging. His No. 1 recommendation is beefed-up powers for the national security adviser to set security policies and priorities, and oversee communication between agencies.

"The level of error, incompetence, and inattention which took place before the flight was sadly mirrored in many ways for many years, in how authorities, governments, and institutions dealt with the aftermath," Major said as he released his massive, five-volume report Thursday.

More than two decades after the bombing, federal officials and lawyers who appeared before Major were unrepentant and still had trouble accepting they had done anything wrong, the judge noted in his report.

"The fact is that, throughout this inquiry, no one on behalf of the government of Canada or its agencies ever made any apology to the families of the victims."

Although he has no legal power to hold the government legally liable, he urged Ottawa to offer a belated "demonstration of solicitude" by appointing an independent body to settle on a figure for monetary compensation to the victims' families.

The initial reaction from Prime Minister Stephen Harper was favourable.

"Issues are raised about an official apology and compensation for families of victims," Harper told reporters. "Let me be clear, unequivocally, that the government will respond positively to those recommendations."

The prime minister was non-committal, however, on a sheaf of other recommendations by Major aimed at ensuring a similar tragedy never occurs again. Harper said it will take time to study those suggestions, and Public Safety Minister Vic Toews indicated it could be a "number of months" before Ottawa is ready to take action.

Families of the victims welcomed the prospect of an apology.

"I see the apology as a public acknowledgment -- as the government's acknowledgment -- of what went wrong and how there is a collective responsibility on the part of the government to address the fact that we, the family members and the victims, were ignored for all these years and the system had failed us," said Lata Pada, who lost her husband and two daughters in the bombing.

Besides a national security czar, other key reforms urged by Major include:

-- Creating a new federal director of terrorism prosecutions to supervise future criminal proceedings.

-- Considering whether the RCMP should abandon the contract policing duties it performs in eight provinces, to free up resources and personnel for more serious investigations at the national level.

-- Tightening loopholes that persist in airport security, especially cargo handling, and boosting efforts to detect and combat the financing of terrorist activity by front groups.

The report was delivered 25 years, almost to the day, after Flight 182, bound from Toronto and Montreal to New Delhi, was downed by a terrorist bomb on June 23, 1985.

There were no survivors among the 329 people on board, most of them Canadian citizens of Indian origin. Another two people perished the same day when a second bomb went off in baggage being transferred to another Air India flight in Narita, Japan.

Both attacks were blamed on Sikh militants based in British Columbia, but only one man, Inderit Singh Reyat, has ever been convicted in the incident -- and that was on a reduced charge of manslaughter.

Talwinder Singh Parmar, the suspected ringleader of the plot, was arrested, then freed for lack of evidence. He left Canada for India, where he was shot dead by police in the Punjab in 1992.

Two other men, Ripudaman Singh Malik and Ajaib Singh Bagri, were acquitted at trial in Vancouver in 2005, in a ruling that outraged the families of the bombing victims and helped lead to the Major inquiry.

It had been known or years that the investigation was plagued by blunders and turf wars pitting CSIS against the RCMP, but Thursday's report added a new level of detail to the story.

CSIS botched a surveillance operation involving Parmar and Reyat just weeks before the attack, then later destroyed key wiretap tapes, eliminating the possibility they could be used as evidence in court.

The Mounties mishandled would-be informants and neglected to provide adequate protection for potential witnesses who feared for their lives. Of three key witnesses, noted Major, one was shot dead before he could testify, another changed her story out of fear, and a third had to go into hiding aft the force inadvertently disclosed her identity.

Both CSIS and the RCMP later provided erroneous or misleading information on their investigations to the Security Intelligence Review Committee, which investigated the bombing in the early 1990s. They also were less than candid in their submissions to former Ontario premier turned Liberal MP Bob Rae, who looked into the affair for the former Grit government.

Major reported as well that the Mounties withheld information from his inquiry about a potential witness who wanted to testify. The force claimed it didn't want him to go public because he might be a useful source in the still-ongoing criminal investigation -- an explanation Major rejected in what he called a "deeply troubling" incident.

Perhaps the most dramatic moment at the inquiry came when former diplomat James Bartleman, who went on to be lieutenant-governor of Ontario, recalled that he was shown an electronic intercept just days before the bombing that warned Air India could soon come under attack. Bartleman said he took the information to the RCMP, who assured him they already knew about the threat and said they didn't need his help.

Federal lawyers mounted a fierce challenge to Bartleman's testimony, saying no record of the intercept could be found in government files and even producing one witness from CSIS who labelled the story a fabrication. Major, however, found Bartleman's story credible and said it was entirely plausible that the paperwork needed to substantiate it had simply gone missing in the intervening years.

In any event, said commission counsel Mark Freiman, there were at least a dozen other incidents in which warning were ignored by the Mounties, CSIS or Transport Canada.

"Even if Mr. Bartleman had never been courageous enough to come forward, there would be plenty of evidence that, if assembled in one place, would have pointed directly to the threat," said Freiman.

"The problem was that all of this information was never assembled in one place."