GROCERY giant Tesco "intentionally delayed" payments to suppliers, a damning investigation into its conduct has found.
A long-awaited report by the Groceries Code Adjudicator (GCA) also found the retailer had made "unilateral" deductions.
GCA Christine Tacon made a series of recommendations to stop the practices, saying the retailer should be more transparent in its dealings with suppliers.
No financial penalty was imposed because this power was only given to the Adjudicator after she launched her investigation.
Her 84-page report said Tesco had breached the legally binding code aimed at protecting groceries suppliers.
"I found that Tesco knowingly delayed paying money to suppliers in order to improve its own financial position," she said.
"The length of delays, their widespread nature and the range of Tesco's unreasonable practices and behaviours towards suppliers concerned me.
"I was also troubled to see Tesco at times prioritising its own finances over treating suppliers fairly."
One supplier was owed a multimillion-pound sum because of price changes being incorrectly applied to Tesco systems.
The money was eventually paid back by Tesco more than two years after the incorrect charging had started, said the Adjudicator.
Ms Tacon launched the investigation - her first - last February following Tesco's announcement about its profit overstatement.
She said she found delay in payments arising from data input errors, duplicate invoicing, deductions to maintain Tesco's margins and unilateral deductions.
"The sums were often significant and the length of time taken to repay them was too long," she said.
A four-week deadline has been set for Tesco to say how it plans to implement the recommendations.
The adjudicator said she found no evidence that Tesco asked suppliers for money to secure better positioning of goods on shelves, which would have breached the code.
But she expressed concern about practices that could amount to an indirect requirement for better positioning by large suppliers.
"I am concerned that, as a result of these practices, the purpose of the code may be circumvented to the detriment of smaller suppliers who cannot compete with payments for better positioning or to participate in range reviews."
The Adjudicator said in her report: "I saw numerous instances when data input errors by Tesco into its systems resulted in suppliers being overcharged or underpaid.
"Tesco failed to rectify data input errors within a reasonable time and also failed to pay money owed to suppliers as a result of these errors within a reasonable time.
"The frequency and scale of the issues resulted in business practices which were unfair."
A "major focus "of Tesco's commercial team was on hitting budget targets, said the report.
The investigation also uncovered reluctance of some Tesco buyers to engage into disputes to resolve payment issues.
In a statement, Tesco's group chief executive, Dave Lewis, apologised and said he accepted the GCA's findings.
He said: "In 2014 we undertook our own review into certain historic practices, which were both unsustainable and harmful to our suppliers. We shared these practices with the Adjudicator, and publicly apologised. Today, I would like to apologise again. We are sorry."
The GCA's report is separate to the Serious Fraud Office investigation into a £326 million accounting black hole at the supermarket.
