Alastair Kelly, reporter to the former Fife Regional Council children's panel, outlined his fears to the director of education after investigating one of Hamilton's summer camps.
George Baxter, head of community use at Woodhill High School in Dumfermline, told the inquiry Hamilton had been refused permission to use the school gym for meetings since 1985. Parents had accused Hamilton of negligence and cruelty. Complaints had also been received about boys being cold and hungry during an overnight stay on an island in Loch Lomond.
Douglas Jeffries, a senior community education worker, who investigated the operation of Hamilton's clubs, also reported his concern to his superiors. No parents or other adults were involved in running the club, which was not -affiliated to any youth organisation.
Hamilton reacted with hostility to Mr Jeffries' inquiries and Mr Jeffries felt uneasy in his presence. Asked why, he said: "I have asked myself that question since the events of March this year. I can only say it was some kind of hair tickling on the back of my neck. It was not objective."
Mr Jeffries was surprised to receive a large bundle of letters from Hamilton 24 hours after their meeting, giving details of his dealings with various official bodies including his successful appeal to the local government ombudsman in the mid-Eighties after his clubs were banned from school premises by another local authority, Central Region. Mr Jeffries felt Hamilton was attempting to pre-empt his inquiries.
The inquiry also heard that the Scouts Association is to tighten its procedures in the light of its dealings with Hamilton. David Shelmerdine, chief executive of the Scottish Council of Scouts, said proposals would be submitted to the Scottish Office before Lord Cullen's report was finalised.
Cross-examined by Andrew Gibb, representing the family of murdered teacher Gwen Mayor, Mr Shelmerdine said the association had no access to Scottish criminal records for vetting prospective scout leaders.
Mr Shelmerdine added: "I did write some few years ago to the Scottish Office on that matter, and asked if there was a possibility of [formal access] happening."
He received only a letter of acknowledgement.
Asked if there should be a national register of those working with young people, Mr Shelmerdine said: "This is a difficult question to answer because of the numbers.
"We have to bear in mind that there are independent local groups that have no affiliation to any parent body."
* The inquiry continues.