The Indian Government said the Sikhs were militants who were campaigning for the creation of a separate state.
The number of deaths has long been disputed, with Sikhs claiming thousands of innocents died in the raid and the years of violence afterwards.
Last month, they pressed the Government for a swift inquiry into the alleged British involvement.
Foreign Secretary William Hague yesterday told the House of Commons that a British official had advised the Indian military to only use force as a "last resort" if negotiations broke down.
However, Mr Hague said, the advice was not acted upon when soldiers stormed the shrine several months later.
Raj Mann, of the Leicestershire Sikh Alliance, said: "It seems the plan suggested by the British military was not used. People wanted a quick response from the Government and this report has been produced in a short time, which we welcome.
"However, there is concern it is too narrow. It has been suggested that there should be a 'truth and reconciliation commission' which would involve the Sikh community, the Indian High Commission and the British Government.
"Mr Hague appeared to be in favour of that and that is also to be welcomed."
Parmjit Singh Gill, former MP for Leicester South and current chairman of the Liberal Democrats in Leicester, wrote to Prime Minister David Cameron about the issue and also met with a Government official last week.
Mr Gill said: "It is my firm belief that it was wrong in principle for the UK to have given any military advice to carry out an attack on the holiest shrine of the Sikh faith, regardless of the degree to which that advice may or may not have been followed.
"I impressed upon the Prime Minister that twice in the past century, in its time of need, the Sikhs voluntarily came to the aid of Britain, fighting and dying in two world wars while receiving a disproportionate number of Victoria Crosses in the process.
"It beggars belief that their debt of gratitude was repaid by a government of this country being complicit in a deadly attack on their holiest shrine that cost many lives."
Mr Hague told the House of Commons: "It is quite right that the concerns that were raised about UK involvement have been investigated.
"It is a strength of our democracy that we are always prepared to take an unflinching look at the past."
High Peak Liberal Democrats