The riots were televised almost live, while social media was abuzz with messages and images of the disturbances that blighted Britain's image across the world.
Prime Minister David Cameron's government has since had preventive talks with representatives of Blackberry, Facebook and Twitter.
The report, titled '5 Days in August', says: "From the evidence around the August riots and from what people have subsequently told us, it seems clear to us that the spread of rioting was made worse both by televised images of police apparently watching people cause damage and loot at will, and by the ability of social media to bring together determined people to act collectively".
The panel comprising four experts, chaired by Darra Singh, said many people felt that 24-hour news coverage on BBC News and Sky News exaggerated the extent of rioting in their area, and helped "make rioting a self-fulfilling prophecy" by inadvertently directing rioters to trouble hotspots.
The panel, however, warned against knee-jerk plans to shut down social networks in time of public unrest, concluding that "viral silence may have as many dangers as viral noise".
The panel, which visited 21 communities and interviewed thousands of people affected by the riots, concluded that there was "no question" that rioters were aided by the existence of social media.
The panel said: "Mobile communications technology is continually evolving and new developments may benefit the police and authorities rather than rioters...What is clear from the riots is that there is no simple 'switch off' solution. Viral silence may have as many dangers as viral noise".
The report said despite the widespread use of social media by rioters, it did not recommend that networks such as Facebook, Twitter be shut down during future disturbances.
It said: "Because of the important and growing role local communities see social media playing in reducing the spread of riots in the future, we recommend that the experiences of communities, public authorities and others in the August riots are considered when new principles are being developed".
The panel added: "We fully support the freedom of the press. We appreciate the challenges around reporting of large scale, fast moving, public disorder events. However, regardless of this, because of the potential implications of inaccurate reporting, it is essential that TV reports are accurate and that the link between the issue being reported and the accompanying images is clear".