The UK state “contributed” to the death of a teenager who took her own life after being groomed by a far-right extremist and later arrested on suspicion of terrorism offences, an inquest has heard.

Rhianan Rudd was found dead in a children’s home aged 16 on May 19 2022, around 18 months after she was detained for downloading a bomb-making manual online and accused of plotting a terrorist attack.

Rhianan, who had autism, had been groomed and exploited by an American extremist, evidence of which led to the charges being dropped five months before her death.

At a pre-inquest review hearing at Chesterfield Coroner’s Court on Tuesday, Jesse Nicholls, representing Rhianan’s family, said while “consideration was given” to whether the teenager was a victim of sexual exploitation, a referral order was only made in August 2021 despite police and MI5 knowing she was a victim for almost a year.

He said: “Rhianan was aware for over a year that she was being prosecuted for serious criminal offences at a time when she was 14 years old and a victim of child sexual exploitation.

“In continuing to investigate and prosecute, and not withdraw the prosecution, the state contributed to Rhianan’s death.

“If Rhianan had been identified as a victim earlier and had Rhianan been signposted to appropriate support, her death could have been avoided.

“The issue is [the investigation] should not have been happening in the way that it was.”

Mr Nicholls claimed that despite the police and MI5 having knowledge of Rhianan being a victim of crime, the referral order was made by a social worker and did not lead to charges being withdrawn until December 2021.

He said this delay contributed to a decline in Rhianan’s well-being which ultimately resulted in her death.

Claire Palmer, representing Derbyshire Police, told the court that police began investigating Rhianan in September 2020 after her mother, Emily Carter, referred her to the anti-radicalisation scheme Prevent.

Ms Palmer said that when she was arrested in October 2020, Rhianan was “at some degree, in crisis”, and was interviewed about her sexual exploitation, but did not believe she was a victim.

She said: “By the time police became involved, Rhianan was sadly already radicalised.

“What the police found was a vulnerable, complex young lady where there were very serious issues.”

Rhianan was charged with various offences in April 2021 and was due to stand trial in March 2022, but charges were dropped after evidence emerged she had been groomed by the American extremist Christopher Cook.

Rhianan, who moved to Derbyshire with her family from Essex in 2012, continued to work with Prevent and was studying for her GSCEs at the time of her death at the Bluebell House Residential Home, on the edge of Sherwood Forest in Nottinghamshire.

After a rapid review by social services, her case was not deemed to meet the criteria for a serious case review into her care.

Mr Nicholls earlier told the court that the inquest should consider how the police investigation affected Rhianan’s state of mind, given how she was a victim of sexual exploitation.

He claimed action was not taken soon enough to see her as a victim rather than an offender.

He said: “The inquest will need to investigate, among other matters, the impact that the investigation may have had on Rhianan’s state of mind.

“Secondly, we say that the inquest should investigate how it came to be that Rhianan was subjected to the criminal justice system for alleged terror offences and whether as part of that adequate or appropriate steps were taken at the right time to recognise her for what she was – a victim of child sexual exploitation – which resulted in the discontinuance of the prosecution.

“For a period of well over a year, possibly significantly longer depending on the date of MI5’s knowledge, the state was effectively investigating and prosecuting a child for serious criminal offences.”

The hearing on Tuesday was also attended by representatives of Derbyshire County Council, Derby City Council and Derbyshire Healthcare NHS Foundation Trust, as well as Blue Mountain, which runs the residential home.

Peter Nieto, area coroner for Derby and Derbyshire, said there is “a lot to understand and consider” regarding Rhianan’s “complex” case, and “lots of issues for Rhianan that were pre-occupying her”.

He said: “There are also issues that need to be understood in relation to her care and support because she was a looked-after child at the time of her death and there were a number of organisations involved with her support and care, and there was also some degree of arrangements for her that might be relevant.

“There is obviously quite a lot to understand about what may have been on Rhianan’s mind at the time she took her own life and what issues might have affected her decision-making leading up to her death.”

Another hearing will take place on September 19, with the inquest due to start on February 19 next year.