"It was a sunny day. The waterfront was busy and the crowd included groups of school-age children. In the words of one witness 'there were children everywhere'," the report says.
Two witnesses were forced to leap over the side of the footbridge and cling on to metal beams above the lagoon to avoid the cars. Children were forced to the edge of the waterfront.
A short time later, the driver and passenger of the Mitsubishi were arrested.
In its report, the authority said the slow-speed Cable St chase was justified but the officer should have abandoned the pursuit as soon as the Mitsubishi went on to the waterfront.
"The already very high risks to the public increased significantly as the pursuit continued along the waterfront to the TSB Arena. It is unacceptable that members of the public had to jump out of the way and climb over bridges to escape harm," said authority chairman Sir David Carruthers.
"The officer's decision to pursue the Mitsubishi, as well as the manner and speed of his driving, put the public at unjustified risk," he said.
The driver of the car was jailed for five months for dangerous driving, failing to stop and theft. The officer involved in the pursuit pleaded guilty to dangerous driving but was discharged without conviction in February.
Acting Wellington District Commander Superintendent Steve Kehoe said police accepted that the pursuit should have been abandoned when it went onto the waterfront.
"We also accept the finding that the lack of any communications by the officer while he was pursuing on the waterfront meant that the pursuit controller had insufficient information to manage [the chase], and had no knowledge of how the pursuit had progressed or of the significant risks involved," Kehoe said.
Police also investigated the chase and a crash investigator established that the average speed of the chase was 39km/h.
"We acknowledge the authority has reached a different view based on the threshold of balance of probabilities," Kehoe said.
He said car chases were complex and police had to make difficult decisions in rapidly evolving circumstances.
"But we acknowledge that better communication and risk assessment could have been used in this instance," Kehoe said.