A royal commission has found the Anglican Diocese of Grafton broke its own rules to avoid compensating abuse victims at a children’s home.

While the Anglican Church is still digesting a damning report on its handling of abuse allegations, an abuse survivor says it still needs to admit it lied and schemed to protect itself.

In the report handed to the federal government on Monday, the sex abuse royal commission found the Anglican Diocese of Grafton caused even more distress to survivors of extreme abuse at the North Coast Children’s Home in Lismore.

In 28 findings the commission noted the diocese failed to follow its own policies in dealing with abuse complaints and instead was hostile and insensitive to victims.

At first it denied liability for the home and then lied about the state of its finances to survivors who came forward.

The findings follow a 2013 commission hearing into how the Grafton diocese handled complaints by men and women who were raped and beaten at the home between 1944 and 1985.

Children were malnourished and flogged with canes, pony whips and belts. Staff, pastors and other inmates raped young children.

Tommy Campion, a 67-year-old former resident and about 40 others came forward in 2006 to seek an apology and redress from the diocese.

Mr Campion welcomed the commission’s findings but said he doubted the church was really facing the fact it lied, schemed and cheated to protect finances and the name of the church.

He wanted the Anglican Church “to see and believe they did wrong”.

And he called on the diocese to pay every cent it owed to abuse victims.

The Anglican Church said it was still digesting the report’s 92 pages and 28 findings.

But it issued a response on behalf of the current Grafton bishop Sarah Macneil and Anglican Primate of Australia Dr Philip Freier, saying the diocese acknowledges “a serious failure in its initial dealings with victims” and apologised unreservedly.

It also says the diocese was reviewing professional standards and was committed to supporting victims of abuse.

In a separate media statement, Dr Macneil said the diocese had reviewed all of the claims it has received for compensation from former residents of the North Coast Children’s Home and reached settlements in most cases.

She also said “the weight and the shame of past failures will remain with us for a long time and regrettably we cannot undo what has been done”.

The commission found settlement negotiations with Mr Campion and others were hostile and contrary to the spirit of the church’s 2005 Pastoral Care and Assistance Scheme and the 2004 Protocol for Dealing with Complaints of Sexual Abuse.

“By denying legal liability on the basis that it did not control the North Coast Children’s Home and not providing a pastoral response, the Diocese of Grafton’s response had a detrimental effect on abused former residents,” the commission found.

The report was particularly critical of the fact the diocese prioritised a private school debt over its financial obligations to the abuse survivors.