Institutional racism is a "blot upon the good name of the NHS", a report on the death of a black patient has said.
The report said Mr Bennett had been the victim of NHS racism
An inquiry said the failure to give ethnic minority people proper mental health care was a "festering abscess".
It follows the death of schizophrenic patient David Bennett in 1998, after he was restrained at a clinic in Norwich.
His sister, Dr Joanna Bennett, called for action against staff involved in her brother's "brutal" death and new measures to protect other patients.
Mr Bennett, 38, collapsed after he was held face down for 25 minutes after hitting another patient - who went on to attack and racially abuse him - and punching a female nurse.
In a statement, Health Secretary Dr John Reid admitted "discrimination" existed in the NHS and added that he was committed to improving mental health services.
Retired High Court judge Sir John Blofeld, who lead the inquiry team, said the death of Mr Bennett - known to friends as Rocky - was "tragic and totally unnecessary".
SOME OF THE REPORT'S RECOMMENDATIONS
Mental health workers should be trained in cultural awareness and sensitivity
Ministers should acknowledge and commit to eliminating institutional racism in mental health services
A National Director for Mental Health and Ethnicity should be appointed
Steps should be taken to ensure an ethnically diverse mental health workforce
A national system of training in restraint and control should be formed within a year
No patient should be restrained in a prone position for longer than three minutes
Records should be kept of all psychiatric units' use of control and restraint
The DoH should publish annual statistics on the deaths of all psychiatric inpatients, which should include ethnicity
His team said it believed institutional racism was present throughout NHS mental health services.
It made more than 20 recommendations including the demand that NHS staff working with the mentally ill are trained in "cultural awareness and sensitivity".
It said patients should be restrained in a prone position for no more than three minutes.
Sir John said clinic staff had not been deliberately racist, but had failed to properly tackle racist comments directed at Mr Bennett by other patients.
It said the decision to move Mr Bennett and not the other patient to another ward after their altercation led him to believe it was because he was black.
"He was not treated by nurses as if he was capable of being talked to like a rational human being, but was treated as if he was a 'lesser' being," the report said.
Mr Bennett's sister welcomed the inquiry's findings, but said that no individual had yet been held accountable for her brother's death.
"No nurse has been disciplined. We call for some action to be taken," Dr Bennett said.
One nurse had been referred to the Nursing and Midwifery Council over the incident, while others have received retraining and supervision, said the Norfolk, Suffolk and Cambridgeshire Strategic Health Authority.
Thursday's report also criticised a delay of several hours in informing Mr Bennett's family of his death and failing to inform them of the circumstances.
One nurse told a family member he died as a result of breathing difficulties - but a clinical nursing specialist said the family could not be given details of his death because an internal investigation was under way.
The "inhumane" treatment of the family had led them to think there was some kind of a cover-up, the report said.
Norfolk Mental Health Care NHS Trust apologised to Mr Bennett's family and friends, adding that it had "not forgotten that this was a tragedy that happened to a real person".
The health authority commissioned the report following a 2002 inquest into Mr Bennett's death in the Norvic Clinic, Norwich.
The inquest jury at King's Lynn, Norfolk, found that he died an accidental death "aggravated by neglect".
Jurors heard he was given unauthorised doses of medication in the days before his death and that nurses used inappropriate restraint procedures.
Jamaican-born Mr Bennett, from Peterborough, Cambridgeshire, had suffered from mental illness since his early 20s.