IN HIS SQUALID West Philadelphia abortion clinic, Kermit Gosnell had a surefire way of dealing with the unwelcome complication of a live birth: He'd allegedly plunge scissors into the squirming newborn's neck, killing it by severing the spinal cord.

Sometimes, the elderly physician didn't do this right away. Often, he allegedly gave the chore to his unlicensed office staff. One premature infant wiggled around on a counter for 20 minutes before an untrained worker slit his neck - after first playing with him.

Those allegations were among countless bombshells in a 261-page grand-jury report that District Attorney Seth Williams released yesterday.

Gosnell killed "hundreds" of babies and at least two women during abortions from 1979 to last year at his Women's Medical Society at 38th Street and Lancaster Avenue, according to the grand jury. Further, he and his unlicensed, unskilled staff overdosed patients with drugs, perforated their wombs and bowels, and spread venereal disease by using unsterilized equipment, the report said.

And although red flags mounted about wrongdoing at the clinic, those with the capacity to stop the carnage, such as the Pennsylvania Department of Health and Department of State, looked the other way, Williams charged.

Gosnell, 69, and nine of his staffers were arrested yesterday morning on charges including murder, infanticide and abuse of a corpse.

Williams said he might seek the death penalty for Gosnell in the murders of seven babies born alive and then killed.

"My comprehension of the English language doesn't and cannot adequately describe the barbaric nature of Dr. Gosnell and the ghoulish manner in which he 'trained' the unlicensed, uneducated individuals who worked there," Williams said.

The atrocities were discovered by accident.

Police last February raided Gosnell's offices after reports that he ran a "pill mill" there, giving out prescription medications to anyone who would pay.

Once inside the three-story brick building, they discovered horrors that would haunt them forever.

Semiconscious, moaning women sat in dirty recliners and on bloodstained blankets. The air reeked of urine from the flea-infested cats permitted to roam the clinic. There was blood on the floor and cat feces on the stairs. One investigator likened the scene to "a bad gas-station restroom."

In the patient areas, equipment was rusty, dirty and broken. Paramedics who were called to remove the patients during the police raid had trouble getting them out because clutter blocked the hallways and the emergency exit was padlocked shut.

But even worse horrors were hidden in the basement and staff-only areas.

Detectives found a row of jars containing just the severed feet of fetuses. Fetal remains filled bags, milk jugs, orange-juice cartons and even cat-food containers; some were stored in a refrigerator where staffers chilled their lunches. In all, authorities found the remains of 45 fetuses in this "baby charnel house" and gave them to the medical examiner, who determined that at least two of them had been born alive, according to the grand-jury report.

The scene was so filthy that grand jurors, visiting the clinic months later, wore hazardous-materials suits, Williams said.

Investigators soon developed a picture of a practice that preyed on poor, ill-informed women desperate to get illegal late-term abortions.

Pennsylvania law prohibits abortions past 24 weeks. Many doctors won't perform them past 20 weeks because of the risks.

But Gosnell would allegedly take any patient, no matter how far along. He fudged state-mandated ultrasound reports to mask abortions done after 24 weeks, according to the grand-jury report.

The bigger the baby, the more he charged; his fees ranged from $325 to $3,000 per abortion, Williams said. Anesthesia was additional, although he and his staffers would "sedate to stupor" patients who screamed or moaned too loudly, according to the report. Investigators estimated that Gosnell's salary for one year was $1.8 million.

Because late-term abortions are complicated, Gosnell and his staffers induced labor, which resulted in "scores" of live births that led to the gruesome "snippings" of their spinal cords, the grand jury found.

Although this allegedly occurred routinely, investigators could document the cases of only seven viable newborns killed in Gosnell's clinic. That's because Gosnell routinely destroyed his files, according to the grand-jury report.

In one case, a staffer told grand jurors, Gosnell joked that the aborted baby was so big he could "walk me to the bus stop." On Sundays, Gosnell, with the aid of his wife, Pearl, performed abortions that promised to be particularly complicated because the office was closed with no office staff, according to the report. He then took the records home and destroyed them, the report said.

Gosnell ignored other requirements of state abortion law, too, such as providing abortion counseling, obtaining parental or judicial consent for minors, and waiting 24 hours after a patient's first visit before performing an abortion, according to the grand jury.

Within days of the February raid, state officials yanked Gosnell's medical license. The clinic was shuttered immediately.

Those moves were decades overdue, D.A. Williams charged. "There's more oversight for women's hair salons than for abortion clinics in the commonwealth of Pennsylvania," he said.

An attorney for Gosnell could not be reached last night, but in an exclusive interview with the Daily News after his office was raided last year, Gosnell insisted that he was helping an underserved neighborhood and running a proper clinic.

"I feel in the long term, I will be vindicated," he said.

Grand jurors blamed racism and politics for inaction.

"We think the reason no one acted is because the women in question were poor and of color, because the victims were infants without identities, and because the subject was the political football of abortion," the grand-jury report stated.

Gosnell was charged with infanticide in the deaths of seven viable infants and with murder in the Nov. 20, 2009, death of Karnamaya Mongar, 41, a Nepalese refugee who died of too much anesthesia at Gosnell's clinic. Other charges against Gosnell include conspiracy, solicitation to commit murder, abuse of a corpse, corrupt organizations, corruption of minors, drug offenses, hindering prosecution and violations of abortion law.