A report into Britain's youngest death in custody will today condemn the youth justice system for treating 14-year-old Adam Rickwood more as a tearaway deserving to be locked up rather than a vulnerable child in need of care.

The serious case review by Lancashire county council's Safeguarding Children Board adds a powerful official voice to calls for reform in the handling of under-16s in youth custody.

It also warns that staff dealing with children such as Adam, who took his own life hours after suffering painful physical restraint at Hassockfield secure training centre in county Durham, work in a legal grey area and could themselves be vulnerable. The restraint used on Adam is described as "probably" breaching the government's training manual and could be in breach of the European convention on human rights.

In one of 49 detailed recommendations, the report says: "The Department for Children, Schools and Families should provide urgent clarification in respect to the legal status of all children placed by courts within the secure estate." The government is also asked to revise and reissue guidance to all agencies with "corporate parental" responsibilities for teenagers in the youth justice system.

The issue has been given additional significance by recent serious youth crime, including stabbings, shootings and the stoning of a pensioner by five under-14s who are now awaiting sentence for manslaughter by an Old Bailey judge. Gill Rigg, who chairs the Lancashire board, acknowledged yesterday that courts were bound to focus on the need to protect society but warned that the balance between custody and care was looking lopsided.

"It is not a matter of one or the other, but getting the right combination of both," she said. "We must look at the problem as a whole if we are to avoid tragedies such as the death of Adam Rickwood.

"We know that as a single local body, we cannot expect our recommendations to result automatically in meaningful changes to the youth justice system, but our job is not only to investigate ... but to ensure that lessons are learned."

The board is part of a national network which last year replaced child protection committees as prime official guardians of troubled young people's interests. Its inquiry began soon after Adam's death in July 2004 but was delayed by a coroner's inquest, which returned a suicide verdict in May and also called for reform.

The board's proposals show concern about the nuts and bolts of youth custody, including lack of communication in Adam's case. He had a record of drink and drug abuse and was remanded in custody by Burnley magistrates in June 2004 on a charge of wounding, but went to a Lancashire children's home because there were no secure youth places available anywhere in Britain.

"He did well at the home, but as soon as a place became available at Hassockfield - after three days - he was transferred there," said Ms Rigg. "There was no mechanism for the court to be told of his progress and asked to adjust its order so that he could stay at the home. That might have made the difference."

The inquest into Adam's death heard that he was miserable and uncooperative at Hassockfield, the nearest secure training centre to his home but still more than 50 miles away. The Lancashire report demands that "system failures" at Hassockfield which emerged during the inquest must be addressed by its director and private operator, Serco, and reviewed by Ofsted and the Youth Justice Board.

Painful restraint techniques on children, such as the sharp upward strike to the nose used on Adam, were at the heart of criticisms. They are due for a national review, after the threat of legal challenge to modifications proposed by the government following the inquest.

The board called for additional consultation and an immediate local review to ensure that Lancashire children are only restrained within current rules and guidelines. Ms Rigg said: "The pain distraction techniques would not be permitted for children in the county council's care."

The serious case review concluded overall that "the present system for children and young people who are subject to youth custody requires closer examination by the Youth Justice Board and government, and alternatives to custodial detention should be explored as a matter of priority".