The judge said he was fully satisfied that the childminder, Mrs Walton, was responsible for the 'non accidental' injuries to babies Thomas Dowling and Simon Hewitt, although her husband was absolved of blame.
The mother who brought the case, Mrs Dowling, can now sue Surrey for damages, while the mother of the second child could now take separate legal action.
Mrs Dowling's case against Surrey revolved round her telephone conversation with the council's child minding officer, Peter Bodycomb, on August 25 1989.
After Simon Hewitt was injured Surrey social services held two case conferences, the results of which were inconclusive, said the judge.
Viewed objectively the two conferences left 'at the very least a question mark about whether Simon had suffered a non accidental injury whilst in the care of Mrs Walton'.
The judge said Mr Bodycomb had perhaps 'found it hard to contemplate that Mrs Walton could have done such a dreadful thing'.
In the event, Mrs Walton remained on the register without being suspended although Mr Bodycomb recommended to her orally that she should only care for children aged between two and five.
The recommendation 'had no force whatsoever', said the judge. He said of Mr Bodycomb: 'he chose to ignore the risk that clearly remained.
'Unfortunately Mr Bodycomb put the interests of the child minder before those of the child when the child's interest should, in my judgement, have been the first and paramount consideration.
'In my judgement the crucial feature of this case is not so much the failure of the local authority to deregister Mrs Walton, but the failure to tell Mrs Dowling the full facts when she made the enquiry on August 25 1989.
'What is crucial is that the local authority had information which an enquiring parent could reasonably expect would be passed on'.
On September 19 1989, after Thomas was injured, Mrs Walton was suspended and her registration was ultimately cancelled on November 13 1989.
'I am afraid the picture I am left with of Mr Bodycomb was one of bumbling inactivity'.
He hoped the problem would go away after Simon was injured by Mrs Walton saying she did not want to continue child minding, said the judge. He found that Mr Bodycomb had made 'negligent misstatements' to Mrs Dowling during their telephone conversation.
Had Mrs Dowling known all the facts surrounding Simon's injury she would never have placed Thomas with Mrs Walton, ruled the judge.
'In these circumstances I find the county council liable in negligence'.
'I find Mrs Waltonis liable in breach of contract, negligence and assault'.
The compensation sought by Mrs Dowling on Thomas's behalf have yet to be assessed and may be the subject of a further High Court trial.