The report, authored by Justice Manmohan Singh Liberhan, apparently blames 68 people for the demolition of the mosque - mostly leaders from the BJP and a few bureaucrats.
Among those named are AB Vajpayee, the former BJP prime minister, and LK Advani, the party's current leader in parliament.
The 1992 destruction of the Babri mosque in the Hindu pilgrimage town of Ayodhya in northern Uttar Pradesh state sparked some of the worst Hindu-Muslim violence since the partition of the Indian sub-continent.
More than 2,000 people, mostly Muslims, were killed.
"[They] could have at least attempted to stem the tide of communalism and the rape of democracy. But they chose to remain deaf, dumb and blind throughout," NDTV quoted the report as saying.
"The demolition was carried out with great painstaking preparation and preplanning."
After details of the report became public, Advani accused India's ruling Congress party of deliberately leaking the inquiry's conclusions to the press and protested his innocence.
"I take strong objection as to how the government has suddenly leaked the report," he told parliament, describing the mosque's destruction as "the saddest moment of my life".
However, Chidambaram denied that the report had been leaked to the press.
Rani Singh, a London-based South Asia analyst, said the report was sensitive because of India's religious make-up.
"Communal tension is simmering below the surface in India," she told Al Jazeera.
"[Congress] wants Hindus and Muslims again divided on a very, very extreme position so that it can reap the full consequences of it"
Tarun Vijay, the editor of BJP's official newspaper
"Although with a Hindu majority population, there are Muslims, Jews, Christians and Sikhs and other religions all living perfectly happily side-by-side.
"But the Ayodhya massacre in 1992 is a terrible scar on India's history that hasn't really healed."
She said the BJP had tried hard to distance itself from the destruction of the mosque and the subsequent killings.
"The BJP has wanted to kind of neutralise its tone a bit and wants to get away from any the whole idea that it planned - or was behind, shall we say - the massacre and the destruction of the mosque in 1992," she told Al Jazeera.
"Having said that, LK Advani does say that his long-cherished dream is to have a Hindu temple erected on that site."
In the 1990s, Advani travelled across India to draw support for his campaign to install a temple on the site of the Babri mosque.
Tarun Vijay, the editor of BJP's official newspaper, said the Congress party appeared to be using the report to create a divide between the country's Hindus and Muslims.
"I think the report very unfortunately comes at a time when the country was going to remember and resolve to fight against terrorism in the wake of the 26/11 attack on Mumbai," he told Al Jazeera, referring to last year's deadly attacks in the Indian commercial capital.
"Perhaps the Congress is again planning to invoke a situation that creates a schism and a conflicting situation between the Hindus and Muslims that has always been a hallmark of the Congress politics.
"It wants Hindus and Muslims again divided on a very, very extreme position so that it can reap the full consequences of it ... to keep Congress in power in the next election."
The BJP, the largest opposition party in parliament, has been already been plagued by internal fighting after a string of defeats in federal and state elections this year.
Devout Hindus believe the Babri mosque was built on the ruins of a temple marking the birthplace of the Hindu warrior Lord Ram.
Zaffaryab Jilani, a leader of the Babri Masjid Action Committee, which has been calling for the mosque to be rebuilt, welcomed the report.
"We have been saying that it was a conspiracy, a well-planned strategy and not a spontaneous action, which led to the demolition of the mosque. This report appears to have come to that conclusion,'' he said