Parliament's Intelligence and Security Committee (ISC) criticises the security services for 'delays' in their investigations which at times was 'inadequate.'
But it says given what the agencies knew at the time 'they were not in a position to prevent the murder of Fusilier Rigby'.
However it slams giant internet firms for failing to hand over key pieces of information which might have helped security chiefs stop the attacks.
It says Adebowale's detailed threat to kill a soldier, posted online in December 2012, was 'highly significant'.
In the most explosive section of the report, it states: 'Had MI5 had access to this exchange at the time, Adebowale would have become a top priority. There is then a significant possibility that MI5 would have been able to prevent the attack.'
The main findings of the report also include:
• Revelations that MI5 delayed submitting an application to monitor Adebowale before he struck in May last year;
• Without a delay submitting the application 'MI5 would probably have had intrusive coverage of Adebowale in place during the days before, and on the day of, the attack';
• The application was sitting on the Home Secretary Theresa May's desk at the time of the killing;
• Intrusive coverage of accomplice Adebolajo from December 2012 to April 2013 showed that he was involved in drug dealing;
• However, it did not provide any intelligence sparking a 'national security concern';
This meant that MI5 had to cancel their coverage of Michael Adebolago in April 2013 - just weeks before the attack.
Speaking this morning, the chair of the intelligence and security committee Sir Malcolm Rifkind accused internet companies of providing a 'safe haven' for terrorists online.
He said it was 'unacceptable' that 'internet companies like Apple, Facebook, Google, Microsoft, Twitter, Yahoo and many others' are refusing to share information with Britain's security services.
Sir Michael said they needed to 'play their part in alerting authorities to people who maybe terrorists'.
Responding to the report today, the British Prime Minister demanded internet companies pass on terror threats to the authorities.
He said: 'It's hard to think of any justification when you have discovered on someone's email account that they are planning or plotting a terrorist outrage not to pass it on to the authorities.'
Mr Cameron stressed that internet companies need to be worried about their public image if they are being used to plot terror attacks as much as they are concerned about their reputation on data security.
The Prime Minister also agreed that some of the companies have a 'distorted libertarian ideology' and see themselves as detached from responsibility to governments and the people they represent.
Mr Cameron also revealed that he regularly takes the issue up with US President Barack Obama after being questioned on internet companies by Labour former home secretary Jack Straw.
In his initial statement, Mr Cameron highlighted the conclusion that an internet company may have had the data to help MI5 stop the attack if it had come to light.
He said: 'The report does not name the company and it would not be appropriate for me to give a running commentary on the level of co-operation from different internet companies.
'But the committee is clear that they have serious concerns about the approach of a number of communications service providers based overseas.
'As I said in my speech to the Australian Parliament earlier this month, there is further to go. 'We are already having detailed discussions with internet companies on the new steps they can take and we expect the companies to report back on progress in the new year.
'The truth is this: terrorists are using the internet to communicate with each other and we must not accept that these communications are beyond the reach of the authorities or the internet companies themselves.
'We have taken action. We have passed legislation. And we will continue to do everything we can.
'And we expect the internet companies to do all they can too. Their networks are being used to plot murder and mayhem.
'It is their social responsibility to act on this. And we expect them to live up to it.'
- Daily Mail UK
