Legal Aid lawyers were left oblivious to a damning government-held report which cast doubt on a tool used to try to lock up or control 25 of their clients on the basis they might commit a terrorist offence in the future.

Guardian Australia has revealed serious problems with the way the federal and New South Wales governments have wielded extraordinary powers to detain or control individuals for crimes they have not yet committed.

The powers are reliant on a tool used to assess an individual’s likelihood of future terror offending, known as VERA-2R, which is used by lawyers for the commonwealth and NSW to convince courts to use continuing detention orders (CDOs) or extended supervision orders (ESOs) to prevent a future crime from occurring.

In May 2020, the then Morrison government received a report on the tool which it had commissioned from the academic Dr Emily Corner at significant taxpayer expense. The report was damning about the use of the tool, saying the “lack of evidence” underpinning it had “serious implications for [its] validity and reliability”.

The commonwealth sat on the report and continued to use the risk assessment tool as the basis for continuing to detain or monitor offenders after their sentence had finished.

The report was not disclosed to defendants, despite its damning findings. It was also not disclosed to the NSW government, which continued to rely on the tool.

The report only came to light more than two-and-a-half years later during a November 2022 inquiry by the national security law watchdog, the Independent National Security Legislation Monitor [INSLM].

Now, the Guardian can reveal that the report was not disclosed to Legal Aid NSW at any point during 25 separate cases involving its clients.

“Legal Aid NSW first became aware of the existence of the report when it was referred to publicly by the INSLM at the 21 November 2022 hearing,” National Legal Aid said in a statement. “Between [the federal government receiving the report] and the November 2022 hearings, legal aid had been granted in 25 state and commonwealth matters where these risk assessment tools had been used.”

When Legal Aid learned of the report in the INSLM inquiry in November, it asked the federal government to disclose the report to it.

The commonwealth would only give it the report on the condition that it make undertakings not to disclose it further.

The INSLM has since recommended that CDOs be abolished and ESOs be significantly overhauled. Legal Aid said it supported those recommendations.

“We welcome the INSLM’s recommendations, remain committed to working constructively with the commonwealth and NSW governments in this area of law, and look forward to assisting in the implementation of the report’s recommendations,” National Legal Aid said.

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The non-disclosure of the report has outraged lawyers who represented individuals who were targeted with the counter-terrorism powers.

Hayley Le, a partner at Ryan Payten Le, said she represented four men who were subject to the post-sentence orders. The Corner report was never disclosed to her.

“It’s a great surprise because these orders are so onerous for every defendant and the state has that obligation to be the model litigant,” she told Guardian Australia. “It is surprising that this has only come to light because of things like us issuing a subpoena and us calling for disclosure; it was never something that they brought forward.”

The federal government says it is investigating the circumstances around its handling of the Corner report and why it was not disclosed. It has also had to explain itself to the Victorian supreme court in one case due to the failure to disclose the material.

The report was not shared with NSW officials until December 2022, according to the commonwealth.

The NSW government has declined to answer detailed questions, including whether it is still using the tool and when it first became aware of the Corner report. But it did say that it does not rely solely on a single assessment tool when applying to detain or control individuals it deems a terrorism risk.

“All risk assessment reports completed by CSNSW [Corrective Services NSW] focus on a comprehensive psychological assessment and do not depend on any single tool.”