The government refused yesterday to accept the three key recommendations of an inquiry into the death of David "Rocky" Bennett which identified a "festering abscess" of institutional racism in the NHS.

John Reid, the health secretary, told MPs he agreed there was unacceptable discrimination against black mental health patients.

But his statement avoided giving the promise demanded by the inquiry that "there should be ministerial acknowledgment of the presence of institutional racism in the mental health services".

He made no mention of the recommendation that he should appoint an ethnicity tsar to spearhead reform. And he deferred a decision on the inquiry's proposal for a three-minute time limit on staff restraining patients by pinning them face down on the floor.

Mr Bennett, 38, a Jamaican-born Rastafarian and talented drummer, died in 1998 at the Norvic secure unit in Norwich. He was killed by being held face down on the floor for 28 minutes by at least four mental health nurses.

The inquiry's findings were leaked to the Guardian last week. At the official publication yesterday, his sister, Joanna Bennett, criticised the authorities for lack of action against the staff involved.

She described the struggle the family had to get him treatment during 18 years as a mental health patient. "Rocky died a brutal death ... What makes me so angry is that he was not the first to die in this way. It's a disgrace that the lessons have still not been learned and since my brother's death several others have died in the same way."

Mr Reid's statement was sympathetic, but fell a long way short of what the inquiry team wanted. The health secretary said: "I accept there is discrimination in the NHS, both direct and indirect."

He went on to list initiatives his department already had under way. However, the family got a different message when they saw him before the launch.

Sadiq Khan, their solicitor, said: "He promised he would come back in May with an action plan. He said he's going back to the drawing board and he understands the need to combat discrimination in the whole NHS, not just mental health."

Members of the inquiry team could not understand why Mr Reid should say one thing in public and another in private, but the family felt he might be more committed to reform than the civil servants who drafted his statement.

Sashi Sashidharan, a consultant psychiatrist on the team, said: "Mr Reid's statement was a major missed opportunity. The inquiry heard evidence about what the department was planning to do and were not satisfied. That was why we made our recommendations.

"We can't leave it to the department any more. Those of us involved in this issue will have to start a campaign to ensure our communities receive the care and treatment they deserve."

Louis Appleby, the department's mental health tsar, said the National Institute for Clinical Excellence would produce guidelines on forcible restraint in March. He said the department did not accept the need to create an ethnicity tsar because the job was already being done by Kamlesh Patel, acting director of the National Institute of Mental Health.

Sir John Blofeld, the former high court judge who chaired the inquiry, said: "Black and ethnic minority citizens should not have to claim their rights, they should be given them as a matter of course."

The Nursing and Midwifery Council said the report failed to address the broader issue of institutional violence. Rick Tucker, adviser on mental health, said: "Nurses have been trained to expect violence and how to react to it, but not how to stop it happening in the first place."