A scathing investigation into the behaviour of special forces personnel found credible evidence Australian soldiers murdered 39 people and tortured two prisoners.

Junior patrol members were ordered to execute prisoners, while weapons and evidence were planted on bodies to cover up unlawful deaths.

In one of the most gruesome incidents uncovered, Australian soldiers cut the throats of two 14-year-old boys and dumped their bodies in a river because they believed they were Taliban sympathisers.

In another, special forces allegedly massacred a village and then tortured survivors for days before killing them.

One SAS squadron is being disbanded following the damning findings, while 19 serving or former soldiers will face possible prosecution and the stripping of their medals.

Compensation will be paid to Afghan families who lost loved ones.

Chief of Defence Angus Campbell considered disbanding the entire SAS regiment after receiving the exhaustive report.

“It was something that the chief of army and I discussed,” General Campbell told ABC radio on Friday.

“But we believe very strongly that the path forward for developing that regiment and Australia’s special operations capability is by committing to building and working with the people to see a better organisation emerge.”

A four-year investigation by Inspector-General of the Australian Defence Force, Paul Brereton, has laid bare a litany of war crimes.

Some of the soldiers accused of atrocities are still serving in the military.

“So I have directed the chief of the army to consider and review the service of those who are currently still in service on a case by case basis,” General Campbell said.

“I’ve got to make sure that whatever we do we treat people respectfully and we follow the processes and we deal with it.

“This isn’t about ignoring it or avoiding it. It’s about making sure we cause no more damage or distress that might otherwise emerge in a very, very difficult situation. But we are determined to deal with it.”

Home Affairs Minister Peter Dutton said it was a dark time for Australia.

“Now we need to help the defence force rebuild and we need to hold those people to account that are alleged to have committed these atrocities,” he told the Nine Network.

“But we also need to put into perspective the fact that we’re talking about allegations against 25 individuals.

“The allegations are as serious as they get, but there are tens of thousands of ADF personnel who have served with great distinction.”

Former prime minister Kevin Rudd is disgusted that Australian soldiers serving in Afghanistan could have committed cold-blooded murder.

Rudd was Australia’s leader during part of the military engagement in Afghanistan.

He compared the behaviour to that of the Abu Ghraib torture and prison abuse scandal.

Rudd joined with Prime Minister Scott Morrison in offering an apology to the government and people of Afghanistan, and backed the need for compensation and justice to be served.