The police shot dead Jean Charles de Menezes despite officers in charge of the operation intending that he should be arrested outside Stockwell tube station and taken into custody alive, new details of the official investigation show.

De Menezes was killed a year ago today after a catalogue of communication and planning errors left firearms officers wrongly believing he was a suicide bomber about to commit mass murder.

As his family gather to mark the anniversary by laying flowers at the south London tube station, the Guardian has learned new details of the investigation into his death by the Independent Police Complaints Commission (IPCC).

The evidence it gathered went to the Crown Prosecution Service, which on Monday announced that no officer would be charged with the death of de Menezes, who was shot seven times in the head and once in the shoulder by two armed officers. A letter from the CPS to his family shows the IPCC investigation found:

• Officers running the operation ordered that de Menezes be stopped from boarding the train and arrested;
• A firearms team was out of position and thus unable to detain him as ordered;
• A misunderstanding between commanding officers and firearms officers meant the order to arrest him was not "made explicit" to the team rushing to the train to stop the suspect;
• When firearms officers arrived they mistakenly thought they had to shoot him because he was going to attack the underground train.

The CPS letter also reveals that the two officers who shot the Brazilian told investigators de Menezes was wearing a "bulky jacket", when he was not. The marksmen also said they had shouted "armed police" before firing, but no independent witness corroborated their assertions.

The letter to the family was written by Stephen O'Doherty, a senior lawyer with the CPS, who decided that the Metropolitan police should face a charge under health and safety legislation for breaching their duty of care to de Menezes.

The IPCC say it will not publish its report until after the prosecution of the Met is completed, which may not be until next year. The CPS says the officers who opened fire honestly believed the Brazilian was a terrorist. Even though they were wrong, the CPS contends there is not enough evidence to convince a jury that their error amounted to a criminal act.

The operation tracking de Menezes as he left a south London flat was run from a control room at Scotland Yard. One senior officer was in charge of the operation, and Commander Cressida Dick was designated as the officer who would decide whether the suspect was so dangerous that a shoot-to-kill policy should apply.

The CPS letter concludes: "The order was given that Jean Charles was to be stopped from getting on the train. Although officers in the control room intended that Jean Charles should be arrested outside the station, the firearms team were not in place to make such an arrest, nor was this intention made explicit to the firearms officers who were being sent down to the train.

"All the available evidence suggests that they believed that Jean Charles had been identified as a suicide bomber, that they had been directed to stop him from blowing up the train and that they had to shoot him to prevent that from happening."

In its letter the CPS gives the most graphic details to date of the last moments inside the tube carriage before de Menezes was shot: "Both [firearms officers] refer to Jean Charles getting up and advancing towards them with his hands down by his side before he was tackled by a surveillance officer and forced back into the seat. The firearms officers then shot Jean Charles. I had to consider whether the prosecution could argue that the restraint meant that no bomb could be detonated and that the firearms officers' actions were unlawful.

"However I must bear in mind that this happened in a matter of seconds and there is some independent evidence that supports the officers' accounts that they feared Jean Charles might detonate a bomb. A witness sitting opposite Jean Charles said: 'I got the impression that he was reaching to the left-hand side of his trouser waistband.'"

The family say the CPS reasoning is flawed and are considering challenging it in court.

The CPS letter also says that it examined the role of those involved in planning the surveillance and those who carried it out, and found that "messages were misinterpreted with tragic consequences", but mistakes made by individuals did not meet the criminal standard of proof.