SYDNEY, April 1, 2008 (AFP) - Widespread sexual abuse of children was ongoing in state care in South Australia for decades, with an inquiry saying Tuesday that hundreds of people came forward to report they were assaulted.

The abuse was allegedly perpetrated by foster parents, social workers, teachers, priests and strangers. Some foster children were used at paedophile parties for sexual gratification, said former Supreme Court judge Ted Mullighan, who headed the three-year official inquiry.

'Nothing prepared me for the foul undercurrent of society revealed,' Mullighan said in his report. 'I was not prepared for the horror of the sexual cruelty and exploitation of little children and vulnerable young people in state care by people in positions of trust.'

The inquiry has referred 170 allegations to police involving 434 perpetrators, with two suspects already arrested.

The inquiry heard from 792 people who said they had been sexually abused by 1,733 alleged perpetrators from the 1930s to the present. Of those, 242 victims had been in state care at the time of the alleged abuse.

The former judge found the abuse of state wards occurred in every type of care including church institutions, the Salvation Army, government and non-government homes for children and youth shelters and foster homes.

Mullighan told reporters he believed sexual abuse of state wards was continuing, the national AAP news agency reported from the state capital Adelaide.

'I don't think there was any doubt that there was a number of groups of people who were preying on children and abusing them,' he told reporters. 'I would be surprised if it's not still happening.'

Mullighan said he was 'appalled and horrified' at the results of his Children in State Care Commission of Inquiry, but added he believed they were only the 'tip of the iceberg'.

State Premier Mike Rann said he was sickened by the 600-page report, which was tabled in the state parliament on Tuesday.

'It turned my stomach, it made me feel physically ill,' Rann told reporters.

The state government would formally apologise to the abused foster children, he said, adding he believed they should be paid compensation.

Rann said the government would respond by June to the 54 recommendations made by Mullighan, including a charter of rights for children and a review of the training of social workers.