A lawyer representing the family of murdered teenager Stephen Lawrence has called for a Leveson-style inquiry into police ethics following allegations of a smear campaign.

Michael Mansfield QC called for the probe in the wake of claims by former undercover Peter Francis, who said he was under "huge and constant pressure" to hunt for "disinformation" to use against the family and others who criticised the police following the teenager's murder in 1993.

Home secretary Theresa May confirmed that the allegations will be looked at by Operation Herne - a review of alleged police corruption in the original Lawrence inquiry - and a separate investigation led by Derbyshire chief constable Mick Creedon under the oversight of the Independent Police Complaints Commission (IPCC).

However, Mansfield said there could be more issues to discover and that "accountability and transparency" should be investigated. He told BBC Radio 4's Today programme: "There is a high likelihood that a lot of what he [Francis] has said is right given that this unit, or squad, has been in existence for over 40 years.

"My big question is: Who knew within the police, who authorised this public money being spent on this?

"A squad of this size, involving these numbers, involving public expenditure of this kind does not go without authorisation from a very high level because if anything goes wrong they have got to be able to rely on the fact that they have got tacit, implicit support at the highest level.

"I think that's why the public need to have something like the Leveson inquiry in relation to the ethics of policing in a so-called democracy."

I feel betrayed

Neville Lawrence, the father of the murdered teenager, described the announcement by May as "completely unsatisfactory" and also called for a judge-led inquiry.

He added: "I am dismayed about the new information that has come to light as a result of the Dispatches investigation.

"I've always felt that my family was under greater investigation than those guilty of killing my beloved Stephen. It is unthinkable that in the extremely dark days and months after my son's murder that my family were subject to such scrutiny.

"I've worked with the police since Stephen's death in good faith to bring the perpetrators to justice and help the police learn the lessons set out in the Macpherson report [the original inquiry into the handling of Lawrence's death]. I feel betrayed by this latest news and it has taken away the faith I had started to build in the police."

Met Police commissioner Sir Bernard Hogan-Howe said he is "shocked" by the claims, adding: "If these allegations are true, it's a disgrace, and the Metropolitan Police Service will apologise".

An IPCC spokesperson said: "We have been notified a referral will be made by the Metropolitan Police Service in relation to today's Guardian story about undercover officers and the Lawrence family.

"We are expecting to receive information from the MPS in connection with the new allegations, which may raise potential conduct matters concerning officers from the MPS' Special Demonstration Squad, which will be considered before making a decision on the level of IPCC involvement."