Queensland Premier Peter Beattie said Attorney-General Linda Lavarch had referred the report to the office of the Director of Public Prosecutions, which said it would only press charges if there was a likelihood of a conviction.

Ms Clements said legislation prevented her from publicly recommending criminal charges.

Dismissing Sergeant Hurley's repeated claims he had not hit Doomadgee, Ms Clements said the policeman was angry at being punched by the Aborigine as he let him out of the police vehicle, and compared his actions to a footballer manhandling an opponent.

"I find that Senior Sergeant Hurley hit Mulrunji whilst he was on the floor a number of times in direct response to himself having been hit in the jaw and then falling to the floor," Ms Clements told a packed Townsville courtroom on the final day of the inquest into Doomadgee's death.

"I conclude that these actions of Senior Sergeant Hurley caused the fatal injuries."

Ms Clements said Doomadgee should never have been arrested, urging police to use alternatives to arrests when dealing with drunks.

Ms Clements criticised the investigation, saying there was a suggestion of collusion between police and that the failure in the initial coroner's report to mention allegations that Doomadgee had been assaulted was seriously deficient. She made 40 recommendations to overhaul procedures for dealing with indigenous people.

The coroner's initial report in 2004, finding that Doomadgee died from a ruptured liver and portal vein and had suffered four broken ribs, sparked a riot on the island that left the courthouse, police station and barracks in ruins.

Mr Atkinson said the force needed more time to respond to the report.

"It would also be inappropriate for me to speculate immediately on future actions in relation to the officers critically named in the report, other than to say that I believe there are no grounds at this stage to suspend any officer," he said.

Mr Beattie said he established a high-level response team to advise cabinet on Ms Clements's findings.

"The question of whether any person should face charges as a result of the death of Mulrunji is one for the independent DPP and the referral of the report should not be seen as a reflection of the guilt or innocence of any person mentioned in the report," Mr Beattie said.

The Queensland Police Union supported Sergeant Hurley, with president Gary Wilkinson saying Ms Clements had indulged in a "witch hunt designed to pander to the residents of Palm Island rather than establishing the facts".

Doomadgee's family said they were pleased with the outcome.

But Palm Island Mayor Erykah Kyle said the island community would only be satisfied when Sergeant Hurley was behind bars.

"All of us will only be happy when Hurley is in jail," she said.

Sergeant Hurley insists Doomadgee's injuries were inflicted during a fall on the stairs of the watch house. He said the pair fell side by side.

Ms Clements found that while he was hitting Doomadgee, Sergeant Hurley had said: "Do you want more, Mr Doomadgee? Do you want more?" He then dragged him into the cell in which he was found dead.

"I reject Senior Sergeant Hurley's account that he simply got up from the heavy fall through the doorway and went to assist the man who had just punched him and caused him to fall over," she said.

"I find that he did respond with physical force against Mulrunji while Mulrunji was still on the floor."