The Home Office's refusal to appoint an independent panel to the so-called "spycops", inquiry, which involves a sitting Peterborough City Councillor, has come under fire at the High Court.
A judicial review of the decision has been brought by three core participants in the undercover policing inquiry (UCPI) - including Patricia Armani da Silva, whose cousin Jean Charles de Menezes was shot dead by police in London in July 2005.
At a hearing in London on Tuesday, Phillippa Kaufmann QC told Mr Justice Supperstone that there had been "a true loss of confidence" in retired High Court judge Sir John Mitting by many core participants over his handling of anonymity applications by former officers.
She added that issues of sexual and racial discrimination were "at the heart" of the inquiry, of which Sir John had only a "primitive understanding".
Ms Kaufmann submitted that it would be a "false economy" for the inquiry - which has already cost more than GBP10 million and is not due to conclude until at least 2023 - to continue with "a panel that lacks the requisite experience to fulfil the terms of reference effectively".
The Home Office argues that there was no obligation on Home Secretary Sajid Javid to reconsider his predecessor's decision not to appoint panel members to the inquiry, and points out that the position is being kept "under review".
Ms Armani da Silva is joined in the claim by "Jessica", who alleges she was deceived into a sexual relationship by undercover officer "Andy Davey", who is now a member of Peterborough City Council, Andy Coles.
Mr Coles denies her allegation.
The third claimant is John Burke-Monerville, whose 19-year-old son Trevor was held at Stoke Newington police station in 1987, was allegedly beaten and left with brain damage, and whose campaign for justice he asserts was infiltrated.
During the hearing, Ms Kaufmann said Sir John's "old-fashioned" remarks that "because (an officer) was a married man, effectively he did not think there was going to be any wrongdoing" had drawn "audible gasps" from those present at a UCPI hearing in February.
She said Sir John's "lack of training, expertise, exposure or understanding is made manifest by comments that he has made on issues of race and sex discrimination", which were "deeply concerning".
Ms Kaufmann added Sir John "understands discrimination to be entirely about a conscious, motivated racism or sexism" and "fails to appreciate the way in which these beliefs or these attitudes operate at subconscious levels and feed their way into the structures of institutions".
She said that for the inquiry to be effective "it must be capable of addressing the issues of discrimination" on the grounds of both gender and race and that Sir John's "expertise in these areas simply does not exist".
Clair Dobbin, for the Home Secretary, said that there was "no obligation" on Mr Javid to retake an earlier decision to not appoint panel members as there were "no material developments which bore upon the decision".
She said that the inquiry would be "far more complex and difficult if it is to be conducted by a group of people", adding that the Home Office was "obviously justified in being concerned about delay" by introducing a panel to hear the inquiry alongside Sir John.
Ms Dobbin said: "According to the current timetable, it will be eight years before this inquiry will issue its final report, five years more than the three years that had originally been envisaged that it would last.
"The appointment of a panel would extend the timetable even more."
She added that Mr Javid's predecessor Amber Rudd had decided in March not to appoint panel members because she was "satisfied that the chair, having regard to his background, had the expertise to conduct this particular inquiry".
Ms Dobbin also pointed out that this was "not a situation where the door has been shut on (appointing) a panel entirely", adding that Sir John had indicated "he would welcome the appointment of panel members when it comes to the important recommendations stage".
She concluded that the "suggestion that the chair lacks the requisite sensitivity or awareness of issues going to race or sexual discrimination" was wrong, saying Sir John's "very careful" approach to anonymity orders suggested "the opposite".
Mr Justice Supperstone reserved his judgment to a later date.