Management inadequacies by the Department for Transport (DfT) over failed Tube maintenance company Metronet have cost taxpayers up to £410m, a report by MPs said today.

The department ignored a clear warning by the National Audit Office (NAO) to avoid taking a hands-off approach over Metronet, the report from the Commons public accounts committee added.

Metronet, which was responsible for maintaining two-thirds of the London Underground system, went into administration in 2007.

Today's report said that, while some of the improvements Metronet was contracted to deliver were completed on time and within budget, others had been delayed.

The report went on: "The loss to the taxpayer arising from Metronet's poor financial control and inadequate corporate governance is some £170m to £410m."

Public accounts committee chairman, Edward Leigh strongly criticised the DfT and said it was “unacceptable” that the department had ignored warnings from the NAO over management of the scheme.

Leigh added: "The department's assumptions were flawed from the outset. It was naive in assuming that Metronet would establish strong financial management and corporate governance. It wrongly assumed that the public bodies given the task of overseeing the devolved delivery of the project had the information and influence to do the job.

"And its assumption that Metronet's lenders would exert strong influence on Metronet's governance and financial health in order to protect their investment was undermined because the department shouldered 95 per cent of the lenders' risks.

"The department got itself into a position with the Metronet contracts whereby it was exposed to big financial risks which it had little scope or means of mitigating.”

Bob Crow, general secretary of the RMT transport union, said the report confirmed that Tube privatisation had been “an expensive disaster for the people of London”.

"The PPP was a flagship policy of Gordon Brown and New Labour and all of those responsible for the Metronet fiasco should be offering Londoners a full apology,” Crow said.

A Department for Transport spokesman insisted that the NAO itself had already conceded that Metronet was responsible for the “fundamental failure” of the PPP.

They added: "We were also prevented from micro-managing the contracts under the terms of the London devolution legislation, which is why since the PAC hearing an independent advisory panel has been established to provide expert scrutiny and advice on the TfL investment programme including the former Metronet contracts."