Sir Ian said the inquiry rewards 'bad behaviour' of some officers
London's former police chief Sir Ian Blair has said he did not think "there was anything racist" in the way the force probed the Stephen Lawrence case.
He was giving evidence to an inquiry into how race and religion affects employment in the Metropolitan Police.
London Mayor Boris Johnson called for the inquiry following a number of race claims against the force.
Sir Ian said the teenager's murder was racist but at the time the force saw people in a "very monochrome" way.
The Metropolitan Police Association Race and Faith Inquiry comes 10 years after the Macpherson Inquiry which looked into the way police handled black teenager Stephen Lawrence's murder.
The inquiry branded the Metropolitan Police institutionally racist.
Mr Lawrence, 18, was with his friend when he was stabbed to death by a gang at a bus stop in Eltham, south east London, in 1993. Nobody has been charged in the case.
Race 'not issue in Lawrence case'
Sir Ian, who resigned last October, had been accused of racism by former assistant commissioner Tarique Ghaffur.
Mr Ghaffur withdrew the claims against the Met and Sir Ian and accepted an out-of-court settlement.
Speaking about the Stephen Lawrence case, Sir Ian said the force treated the Lawrence family as other working class people.
'Treating working class'
He said: "Anybody who had read the Macpherson Report would recognise an institution that was treating people in a very monochrome way.
"I don't necessarily believe there was anything racist about the activities of the Metropolitan Police in relation to the Lawrences.
The Stephen Lawrence murder took place in southeast London in 1993
"What the investigators did was they treated the Lawrences as they treated a whole range of working class people and they just did not understand the expectations and experiences of the black community. That is what has changed."
Sir Ian said the tag of 'institutional racism' was "very helpful" as the force had learnt from it but it was also "very unhelpful" as many officers "did not understand it and saw it as a personal affront".
Sir Ian said officers were not racist in the Stephen Lawrence case
Sir Ian also spoke about the race claims which resulted in him resigning and criticised the ongoing inquiry.
He said: "I am probably the only one who can appear in front of it and say there is a sense this inquiry is rewarding bad behaviour.
"Last year there was an extraordinary concept that people of seniority should attempt to take the organisation to tribunal.
"Tribunals are for people far below that and it was a grave misfortune," Sir Ian said.
He rejected claims that he had favoured a "golden circle" of officers but admitted that it may be difficult for minority staff to break into informal groups as "people tend still to socialise with people who look like and behave like and sound like them".
Sir Ian also said the Met Black Police Association's (BPA) call for a boycott of ethnic minority recruitment was "absurd".
"I took extreme umbrage at the Met BPA describing what happened in the summer as ethnic and religious cleansing."
Following the race claims last year, the Met BPA broke off links with Scotland Yard bosses in October, only re-establishing contact last month.
The race inquiry will also hear from the chairman of the Equality and Human Rights Commission (EHRC), Trevor Phillips, who argued that the term "systematic bias" ought to have been used instead of 'institutionally racist' to describe the Met, will also give evidence to the inquiry.
A recent EHRC report found that while some progress had been made, young black and Asian men were still far more likely to be stopped and searched than their white counterparts.
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