LONDON -- Ikea, the Swedish furniture chain, knowingly benefited from forced labor in the former East Germany to manufacture some of its products in the 1980s, an investigation revealed Friday.

A report by the auditors Ernst & Young concluded that political and criminal prisoners in the former East Germany were involved in making components of Ikea furniture and that some Ikea employees knew about it. Ikea had commissioned the report in May following allegations that the company knowingly used forced labor between 25 and 30 years ago.

Ikea said Friday it was sorry about the incidents and pledged to donate funds to research projects on forced labor in the former German Democratic Republic.

"We deeply regret that this could happen," Jeanette Skjelmose, sustainability manager at Ikea, said in a statement. "The use of political prisoners in production has never been acceptable to the Ikea Group. At the time, we didn't have today's well-developed control system and obviously didn't do enough to prevent such production conditions among our former GDR suppliers."

Allegations against Ikea started to appear about a year ago in media reports in Germany and Sweden that the company worked with suppliers in the communist former East Germany that benefited from forced labor by political prisoners of the regime. The workers were believed to have lived in East Germany in the 1980s and were arrested for criticizing the government and its policies.

Ernst & Young concluded that state-owned companies during the communist regime of East Germany often used prisoners as workers because of a labor shortage and that Ikea purchased products from these companies.

"The GDR did not differentiate between political and criminal prisoners," Ernst & Young wrote in the report, adding that "during this time period, many innocent individuals were sent to prison."

The report said employees of Ikea did visit the production sites in the former East Germany but that the rules regarding such visits were strict. Any visit had to be registered and approved in advance, could only take place in selected parts of the plants and a representative of the East German government had to be on site.

Ikea had repeatedly raised concerns about the possible use of forced labor at the time but no decisive action was taken.

"Even though Ikea Group took steps to secure that prisoners were not used in production, it is now clear that these measures were not effective enough," the company said.

Ernst & Young also looked into whether the company benefited from forced labor in Cuba in the late 1980s. Cuba had trade relations with East Germany, so the auditors also looked into whether Ikea furniture might have been produced through sub-suppliers in that country. It concluded that Ikea only purchased a limited number of test products from Cuba.

The report is based on more than 90 interviews of former and current Ikea employees and witnesses from the former East Germany as well as on historic documents from Ikea's and the German federal and state archives. There was also a public hotline in place that witnesses could call with information.