Campaigners and lawyers representing torture victims have walked away from the coalition's detainee inquiry because of its lack of "credibility or transparency".
Ten human rights organisations including Liberty, Reprieve and Human Rights Watch announced they would refuse to participate.
Their move is a major blow to the government's hopes of placating public suspicions about Britain's complicity in the torture of terror suspects with judge Sir Peter Gibson's probe.
A letter to the inquiry's solicitor outlining the reasons for the decision claimed the inquiry conducted under current plans would not be compatible with article three of the European convention on human rights, which prohibits torture.
"We are particularly disappointed that the issue of what material may be disclosed to the public will not be determined independently of government and, further, that there will be no meaningful participation of the former and current detainees and other interested third parties," the letter stated.
Under current plans the Cabinet secretary Sir Gus O'Donnell will have the final say over what material is not published on security grounds.
The definition of evidence which will remain classified covers anything which would in any way breach an 'understanding' between the UK and its allies.
"Since the torture inquiry was announced a year ago, we have tried repeatedly to make it work," Reprieve investigator Tim Cooke-Hurle said.
"It is frustrating that the government has instead chosen to proceed with a secretive and toothless review.
"By ignoring the concerns of torture victims and major human rights organisations, the government risks a pointless whitewash."
If a British agent watched Americans abusing a prisoner, Reprieve argued, the inquiry will determine that the agreement was that they were only present on the 'understanding' that nothing should be made public.
The inquiry has also attracted criticism because detainees will not be allowed to know what evidence is given by the security services about the agencies' involvement in torture and unlawful rendition.
It does not have the ability to compel witnesses to attend or evidence to be provided.