An “Orwellian” unit that was accused of obstructing the release of material requested by the public under the Freedom of Information Act is to be replaced, the government has announced.

The Cabinet Office clearing house, which circulates details of certain FoI requests by journalists, campaigners and others around Whitehall and also advises on how to respond to them, is to be replaced by a freedom of information “centre of excellence”.

It comes on the recommendation of an internal review, published on Thursday, which was commissioned amid widespread concerns over a lack of transparency surrounding the unit and its powers to control the release of potentially embarrassing information.

While the clearing house was shrouded in secrecy, the government said transparency would be built into its replacement.

The review said there should be “better application” of the “applicant blind” principle, which dictates that the organisation considering the request should do so without considering the requester’s identity or motives. In its response the government suggested the clearing house was already in compliance with this principle.

However, it agreed to remove the names of requesters from “round robin” lists, circulated by the clearing house to departmental FoI teams, which included details of FoI requests made to more than one department at the same time and in the same/or similar terms. The review said use of the round robin system “should be reduced to a minimum”. It also said that the clearing house should provide guidance and advice “for uncommon, complex and national security related FoI cases only”.

In 2020, openDemocracy revealed how the clearing house had advised that the release of documents related to the contaminated NHS blood scandal needed to be “managed”, saying former ministers would be “very sore” over the disclosure of information about their time in office.

The following year, the government lost a three-year battle to prevent the release of documents about the clearing house after openDemocracy requested information about it. Judge Hughes concluded that there was a “profound lack of transparency about the operation”, and a “lacuna in public information” about how the Cabinet Office ensured transparency.

Responding to publication of the report, Lord True, minister of state for the Cabinet Office, said: “After nearly two decades, and in the light of recent criticisms and a continuing increase in the volume of FoI requests to central government, it is appropriate to review the operation function and to ascertain the optimum working model to support the effective operation of the Freedom of Information Act across government.”