The police watchdog has been criticised for using retired officers to investigate their former colleagues.
A committee of MPs said it was "clearly inappropriate" for the Independent Police Complaints Commission (IPCC) to send in former police officers as investigators looking at their old force.
Doing so damaged public confidence in the impartiality of the watchdog, the Home Affairs Committee said.
But the report provoked a furious reaction from the IPCC, which said there were "absolutely no circumstances" in which investigators would be tasked with looking into complaints against anyone they had worked with.
IPCC chairman Nick Hardwick said the report did not present a "balanced picture" and accused the committee of relying on "hostile" witnesses.
In the highly critical report, the MPs said investigations of complaints against the police took too long, were handled in an "unsatisfactory" way and lacked transparency.
The report said: "Ex-police officers should not end up investigating possible ex-colleagues in their former force. Public confidence in the impartiality of the IPCC is bound to be damaged by these practices.
"We are shocked that this situation has been allowed to develop and recommend that steps are taken to prevent this occurring and to remove any hint of impropriety."
The IPCC faced criticism in recent months for its handling of complaints about the G20 protests last year, including alleged "delays" in looking at the death of newspaper seller Ian Tomlinson. The report said it was "unsatisfactory" that investigations carried out by the IPCC were taking up to 269 working days.
In response, IPCC chairman Mr Hardwick said: "The committee chose to take evidence only from witnesses who were hostile to the IPCC and have polarised views of policing. We are disappointed that the committee accepted and reported as fact a number of assertions these witnesses made which are demonstrably untrue."
