Pedestrians were forced to leap over a footbridge during a police pursuit on the Wellington waterfront which the Independent Police Conduct Authority has found put the public at "unjustified risk".
The incident began in April last year when a police officer discovered that the driver of a Mitsubishi had stolen a radar detector from another vehicle.
A short time later, the officer began a pursuit after the Mitsubishi was spotted but the driver failed to stop.
The officer followed it as is drove the wrong way down Cable St - a one-way street - and onto the Wellington waterfront at Taranaki Street where it entered a predominantly pedestrian area.
The report said it was sunny at the time and the waterfront was busy with pedestrians, including groups of children.
Two witnesses said they were forced to leap over the side of the footbridge at the time and a group of children were forced to the edge of the waterfront to avoid the cars.
The authority estimated that the officer followed the Mitsubishi at speeds of between 47.7 and 59.85km/h.
The driver and passenger of the Mitsubishi were arrested a short time later.
In its ruling, the authority found the officer was justified in pursuing the Mitsubishi along Cable Street at a slow speed.
But it said he should have abandoned the pursuit as soon as it became apparent that the driver of the Mitsubishi was able to access the waterfront area.
"The already very high risks to the public increased significantly as the pursuit continued along the waterfront to the TSB Arena.
"It is unacceptable that members of the public had to jump out of the way and climb over bridges to escape harm", authority chair Sir David Carruthers said.
"The officer's decision to pursue the Mitsubishi, as well as the manner and speed of his driving, put the public at unjustified risk."
The officer was charged with dangerous driving. He pleaded guilty to the charge and on 1 March 2017 was discharged without conviction.
The judge said at the time his driving constituted a low level offence.
The man he chased was later jailed on theft charges.
Police said they accepted the IPCA's findings.
"Once the pursuit entered the Wellington waterfront the officer driving the unmarked police car should have recognised the extreme risk to members of the public and abandoned the pursuit immediately," acting Wellington District Commander Superintendent Steve Kehoe said.