Two theatre bosses failed to act when evidence emerged the venue had been infiltrated by paedophiles, an official inquiry has found.
Two members of the board of trustees at Hinckley's Concordia Theatre "brushed under the carpet" concerns raised about two men, an investigation by the Charity Commission concluded.
One of the trustees, the commission said, took no action after being made aware several years ago of an allegation of inappropriate behaviour made against actor Matthew Wilson.
Wilson was jailed for nine years in June last year after he admitted a series of sexual offences against children.
Wilson, then 34 and living in Elm Tree Drive, Burbage, also admitted downloading more than 2,000 indecent images of young girls.
The commission also said the two trustees, who resigned this year, did not inform their colleagues when they discovered the second man, who was employed at the theatre, had previous convictions for offences against children.
The Charity Commission said the two trustees' failings amounted to misconduct and/or mismanagement.
The theatre's licence to stage performances involving children was suspended earlier this year when police revealed the venue was under investigation.
The licence has since been reinstated. The venue, which is run as a charity, is under the management of a new board of trustees. The commission stressed it had full confidence in the new board.
Michelle Russell, director of investigations, monitoring and enforcement at the commission, said: "Trustees should ensure they take seriously and react promptly and responsibly to concerns raised.
"In this case, concerns raised were brushed under the carpet."
"We give credit to the current trustee board in how they responded to dealing with this and ensuring that public confidence in the charity is restored.
Police made public their concerns about potential paedophile activity at the theatre in February, reporting that two other men with connections to the venue had been arrested on suspicion of possessing indecent images of children.
Those suspects remain on bail while inquiries continue.
Leicestershire County Council and Leicestershire Police conducted their own inquiries into the venue.
A fifth man associated with the theatre was found to have convictions for offences against children, Leicestershire police told the Mercury earlier this year. However, the commission's report made no reference to that case.
The county council initially suspended the licence needed to allow children to take part in performances.
Ivan Ould, the council's cabinet member for children and families, said: "Keeping children safe is our number one priority and given the major concerns raised, issuing performance licences wasn't an option.
"The theatre now has robust safeguarding procedures firmly in place.
"We've worked very closely with the Concordia and provided comprehensive advice and training to help them draw up and embed a new approach, and will carry out ongoing checks as part of our regular performance licence process.
"We would welcome contact from any other theatres in Leicestershire which feel they need further advice about their safeguarding procedures and practices."
A police spokesman confirmed officers were still investigating two men for alleged possession of indecent images of children.
He said: "The new trustees have moved a long way and have done everything we have asked to ensure young people are in a safe regime when they are at the theatre." A spokesman from the theatre said: "The Charity Commission has recognised the work carried out by the theatre in the early part of 2014 to strengthen its safeguarding procedures. "We worked very closely with all of the relevant stakeholders – including Leicestershire Police and Leicestershire County Council – to put in place a much more robust set of child protection measures, in line with their advice and guidance. "The new policies have now been in place for over six months, but we continue to liaise closely with the authorities to ensure that the Concordia Theatre remains a safe environment for all."
