Legal case involved 40 youngsters who were locked up in adult units under Home Office policy deemed to be unlawful

The Home Office has paid compensation of more than £1m, plus £1m costs, in a case involving 40 child asylum seekers who were wrongly detained as adults, the Guardian can reveal.

It is thought to be the first case of its kind and the largest immigration detention payout for a single case.

Government officials accepted that the policy was unlawful and changed it as a result of this case. However, data passed to the Guardian shows that children are still being detained.

The case that resulted in the £2m payout involved girls and boys, including 25 aged 14 to 16, from countries including Afghanistan, Iran, Sri Lanka, Nigeria, Eritrea, Uganda, Somalia and China.

The youngest was a 14-year-old girl from Sri Lanka. Some were survivors of torture in their home countries and some of the girls were survivors of rape and other forms of sexual violence.

Some of the children were locked up for more than a month. and o. One boy was moved around the country and held in seven different adult centres including Dover, Campsfield and Harmondsworth during his 74-day detention. “I cried myself to sleep every night,” he said. “Nobody explained what was going on and I never knew what was going to happen to me when I woke up the next morning.”

A 16-year-old Eritrean girl who was detained said: “I couldn’t believe it. I had fled Eritrea to escape prison and thought I’d arrived in a safe country, but now I was being locked up again.”

Some of the 40 had been assessed by social services and declared to be children. They showed officials letters from social services stating that they were looked-after children, but the Home Office still detained them.

Mark Scott, of Bhatt Murphy solicitors, who acted for the 40 children, said: “These children arrived in the UK as children, without the support of their families. They had committed no crime, yet were detained by the immigration service in conditions the Home Office admitted were unsuitable for them.

“One of the most shocking aspects of the case was that, despite the widespread concerns about what was going on, the Home Office did nothing to change the situation until they were forced to do so by children bringing litigation.

“The fact that they’re still locking up child asylum seekers in these centres is a complete scandal. It’s unclear precisely what lessons the Home Office has learned.”

When the 40 children were detained as adults there was no shortage of guidance about “age-disputed” children available to the Home Office. The UN Refugee Agency, the Royal College of Paediatricians and the UN committee on the rights of the child all issued guidance on age assessment of asylum seeker children, emphasising the best interests of the children should be prioritised. In March 2002, HM Inspectorate of Prisons expressed concern about Home Office handling of age-disputed asylum seekers.

Many of the children were placed in Oakington detention centre in Cambridgeshire, which was closed in November 2010 following the expansion of other detention centres.

The lawyers argued that Home Office officials with no specialist knowledge or experience of working with children simply looked at the appearance and demeanour of the children before deciding how old they were.

On Friday night, a UK Border Agency spokesman said: “We take the welfare of young people exceptionally seriously. Where there is any doubt over an individual’s age, they will not be detained unless an independent local authority age assessment concludes that they are over 18. These checks are carried out by social workers with expert knowledge.

“All of our frontline staff receive specialist training to ensure the welfare of young people is considered at every stage.”

He said some children told officials they were over 18 but they would be released from detention pending a full age assessment if credible evidence emerged that they were under 18.

The case, concluded in 2010, was settled out of court and has only come to light now following a freedom of information request by the Guardian. A total of £1,020,000 was paid to the children in compensation for their wrongful detention in adult centres and £1,085,000 was paid in costs in a legal battle that lasted five years. Although government policy changed as a result of the case, the Refugee Council has passed unpublished statistics to the Guardian showing that this unlawful practice is continuing. In 2010, the charity worked with 26 children detained as adults and subsequently accepted as children; in 2011, 22 cases have been confirmed and some have still to be resolved.

Helen Johnson, operations manager at the children’s section of the Refugee Council, said there might be other cases it was not aware of.

Concern about the detention of all child asylum seekers – young children detained with their parents and under-18s detained in adult facilities – has grown in recent years. In 2009, 1,065 child asylum seekers were locked up.

Nick Clegg, the deputy prime minister, announced in December 2010 that the “shameful” practice of detaining children would end, to be replaced by a “fairer and more compassionate approach”.

Critics acknowledge that children are now held for shorter periods – a maximum of one week – but are concerned that children continue to be detained despite Clegg’s promise.

The most recent figures released by the Home Office show that 17 children were detained in December 2011 in three different centres. Nine of them were under five.

When the 40 children were detained as adults there was no shortage of guidance about “age-disputed” children available to the Home Office. The UN Refugee Agency, the Royal College of Paediatricians and the UN committee on the rights of the child all issued guidance on age assessment of asylum seeker children, emphasising the best interests of the children should be prioritised. In March 2002, HM Inspectorate of Prisons expressed concern about Home Office handling of age-disputed asylum seekers.

Many of the children were placed in Oakington detention centre in Cambridgeshire, which was closed in November 2010 following the expansion of other detention centres.

The children’s lawyers said their clients were denied the additional safeguards available to child detainees, subjected to distressing interviews with immigration officers who were not trained to deal with children, and had their welfare put at risk.

Refugee Council data shows that 55% of 275 age-disputed cases sent to Oakington between November 2003 and January 2006 were found to be children when assessed by social services.

Theguardian