The patients died after being contaminated with Clostridium difficile -- a secondary infection caused by poor hospital care according to the Healthcare Commission, the governmental watchdog agency.
"It's a scandal. It's awful," British Health Secretary Alan Johnson told BBC Radio 4's Today programme.
Symptoms include severe diarrhoea, especially in the aged.
The infection was also a factor in the deaths of 124 other patients and probably figured into the deaths of 55 others in three hospitals in the county of Kent, according to the report.
The report underlines that during four successive waves of infection between April 2004 and September 2006, the hospitals faced a serious lack of personnel.
Nurses did not even have the time to wash their hands nor quickly clean some patients who were soiled by their own excrement, it said.
"To suggest in this particular incident, this reflects what's happening in the National Health Service across the country is absolutely wrong," Johnson said in the interview.
In responding to criticism that British hospitals are more concerned with meeting government waiting-time targets, Johnson replied, "There are nurses and clinicians across the country who have dealt with the targets ... but kept the highest safety standards," he added.
The same hospitals did not detect the first two waves of infection caused by this bacteria, according to the report.
Kent police are looking into the possibility of opening a criminal investigation, their spokesman said Thursday.
Johnson promised to send the damning report to all hospital employees including administration staff to stress what can happen when basic hygiene rules are not respected.
The head of administration for the three hospitals, Rose Gibb, resigned last week.
British Prime Minister Gordon Brown promised to make a great effort to get hospitals to enforce basic hygiene rules when he addressed the issue during a speech at the Labour Party conference in September.