Aaron Farmer got a formal apology and $350,000 this week for the 27 months he spent in prison for a crime he didn't commit. Police consider the case closed, but it remains wide open - and it smells.

For one thing, whoever raped the woman Farmer was wrongfully convicted of raping in Christchurch in 2003 remains at large. Police are not investigating, presumably because the trail has long gone cold.

But the case raises deeply disturbing questions about police mindset and practice, which may not be easily dismissed. Associate Justice Minister Nathan Guy, who announced the compensation package this week, was at pains to emphasise that "we have a strong and fair justice system in New Zealand but occasionally it gets things wrong".

Assistant Police Commissioner Mark Burgess - who, as it happens, was the Acting District Commander in Christchurch during the period that the case against Farmer was being prepared - gave an equally bland response.

"We know that our interviews are subject to scrutiny," he said, "and the courts have told us 'Don't mislead suspects'. So to do it is just dumb."

His remarks referred to the fact that a detective told Farmer that his DNA had been found on the victim. It had not. And later, more sophisticated DNA testing specifically exculpated Farmer.

But Burgess' comment is a none-too-subtle piece of sophistry. It seeks to imply that the fault lay with that single officer, who has been sternly criticised by the courts and his superior but is still working for the police - though not as a detective.

The problem is that the Farmer case hints at a much deeper systemic failure. The Court of Appeal quashed his conviction, on the grounds that his lawyer had not presented potentially important alibi evidence, and ordered a retrial. When the new DNA evidence excluded him, the Crown dropped the charge.

Robert Fisher QC, who was engaged by the Ministry of Justice to advise on the matter of compensation, found that "[the] deceptive police conduct ... did not contribute" to the conviction. But much more damning was his conclusion that "the evidence positively supporting [Farmer's] guilt was particularly thin". Apart from the alibi evidence and the improbability of the timelines, he raised six separate and striking differences between Farmer and the rapist as he was described by the victim.

In other words, a single barrister quite easily spotted gaping holes in the police case which the police themselves had either missed - or wilfully ignored. Not only did Fisher draw the conclusion that Farmer was not guilty beyond reasonable doubt - a cornerstone of our criminal justice system - but that he had established his innocence by the same margin.

This is not, then, a matter of a single bullying cop attempting to bluff a suspect into a confession. The case against Farmer went across the desks of senior officers and Crown prosecutors, who pursued it despite its manifest and manifold implausibilities. And it has been almost four years since the Crown abandoned the case. That's a long time to wait for Guy's "strong and fair justice".

The prosecution, albeit unsuccessful, of Sergeant Martin James Folan on six assault charges can be seen as demonstrating a police commitment to call officers to account, and Folan still faces internal disciplinary hearings. But the Farmer case will do nothing to ease disquiet, particular when top brass seek to make light of a serious - and apparently cynical - failure to do the right thing.