Dr Wakefield abused his position of trust as a medical practitioner, failed in his duties and brought the profession into disrepute, the panel said.
In researching links between autism, bowel disorders and the measles, mumps and rubella vaccine he ordered unnecessary invasive tests on children without proper ethical approval.
He also failed to disclose conflicts of interest to The Lancet medical journal which published his findings that sparked the collapse in public confidence of the vaccine.
Dr Wakefield and two colleagues, Prof John Walker-Smith and Prof Simon Murch, are charged with serious professional misconduct over their research methods and face being struck off the medical register.
Politicians said the findings were damning and raised questions about research regulations.
Dr Wakefield, who was not present at the hearing but made a statement afterwards in front of supporters, said he would continue his work 'in earnest'.
The GMC has heard 148 days of evidence over two and a half years and has adjourned to deliberate if the three doctors are guilty of serious professional misconduct and what if any sanctions should be applied.
Panel Chairman Dr Surendra Kumar was heckled by parents as he read the findings in the case.
Children were enrolled in the study who should not have been and were subjected to tests including brain scans, colonoscopies and spinal taps, that were not justified or necessary, the panel said.
Dr Wakefield said the children were referred in the normal way where as in fact this was not true for some of the children.
In March 1999, at his son's birthday party, Dr Wakefield paid children to have blood taken for the research, later describing the event in humours terms, Dr Kumar said.
He added: "You showed a callous disregard for the distress and pain that you knew or ought to have known the children involved might suffer.
"You abused your position of trust as a medical practitioner and your conduct...was such as to bring the medical profession into disrepute."
After the hearing Dr Wakefield said he was 'extremely disappointed by the outcome' and said the allegations against himself and his colleagues were 'unfounded and unjust'.
Surrounded by supporters he said: It remains for me to thank the parents whose commitment and loyalty has been extraordinary.
"I want to reassure them that science will continue in earnest."
Dr Evan Harris, Liberal Democrat MP, who has previously been a member of the research ethics committee in Oxford, said: “That the GMC has found Wakefield guilty of unapproved and unnecessary invasive tests, including spinal taps, on young children, is the most damning indictment possible. The findings of failure to declare financial interest are a secondary consideration.”
“Dr Wakefield’s reputation and that of his campaign and claims lies in tatters, and it sad that it has taken so long for this to be demonstrated.“
“If we have research ethics approval systems for anything, then it is to protect vulnerable people from unwarranted onerous research interventions and experiments – and I can think of few more vulnerable groups in our society than autistic children and their distressed parents”.
“These findings suggest that not only was Wakefield at fault, but the entire system of ethical approval has been brought into question. We need to look into the quality of ethics committee decision making that was in place at this hospital.”
“The Lancet article should never have been published, and its peer review system failed. The article should now be expunged from the academic record, and journals now need to check that experiments described in submitted papers actually match the research protocol which was given ethical approval.”
“It is tragic that the otherwise distinguished careers of Prof Walker-Smith and Prof Murch have been dragged down by their insistence on trying to stand or fall with Dr Wakefield.”
Shadow Health Secretary, Norman Lamb said: “The impact of Dr. Wakefield’s conduct on public health in this country has been profoundly and deeply damaging.
“The dramatic decline in take up of the MMR vaccine resulting from unfounded fears generated by Dr. Wakefield have set back this key health initiative in the most serious way.
“This has been a long, drawn out process. The critical thing now is to rebuild public confidence and finally lay to rest the suggestion that children’s health is at risk from this vaccine.”