French security "failed" in assessing the danger posed by Mohammed Merah, the French Interior Ministry said in a report.
The 17-page report, which was submitted Tuesday, confirmed that the French domestic intelligence agency DCRI had been monitoring Merah since last November, four months before he gunned down three French soldiers and killed four at a Jewish day school in Toulouse.
Among the "various objective failures" noted in the report, the domestic spy service was unaware that Merah, who had at least 15 previous criminal convictions, had attacked a neighbor with a sword in June 2010 after she complained that he had shown her son a jihadi video depicting decapitation.
The report by IGPN, the French police comptroller, said the security service "identified the change in Merah's profile very late" despite repeated warnings that he had radicalized in France and abroad.
Had the change been observed, the service may have increased surveillance on Merah, who turned into an Islamist hardliner in prison in February 2008, the report found.
Merah's transformation to a radical only became apparent to the agency two years later.
His departure to Pakistan in August last year also went unnoticed because he passed through Oman, which is not on the French intelligence's 31-country outbound travel watch list.
At the Omar Hatzolah School in Toulouse, Merah killed three Jewish children and a rabbi.