An interim investigation into the West Coast Main Line franchise process has found “significant errors”, a “flawed process” and “inadequate planning”.
The findings were revealed by Transport Secretary Patrick McLoughlin in a statement to the House of Commons.
But he said his department had been “frank and open” about the mistakes.
The decision to award the multi-billion pound rail franchise to FirstGroup over Virgin was scrapped by the government on 2 October.
The bidding process for the line, which serves 31 million passengers travelling between London, the West Midlands, the north-west of England, north Wales and the central belt of Scotland, was also put on hold after “significant technical flaws” were discovered.
The transport secretary said the flaws came about because of mistakes by Department for Transport (DfT) staff and three civil servants were suspended.
Mr McLoughlin told MPs he received the interim report into the franchise collapse from Sam Laidlaw, who was commissioned by the Department for Transport to look into what happened.
He said the report made “uncomfortable reading” before he outlined its findings.
In a letter to Mr McLoughlin, Mr Laidlaw wrote: “In seeking to run a complex and novel franchising competition process, an accumulation of significant errors, described in the report, resulted in a flawed process.”
He added: “These errors appear to have been caused by factors including inadequate planning and preparation, a complex organisational structure, and a weak governance and quality assurance framework.”
In his statement yesterday, Mr McLoughlin said there had been a lack of transparency, inconsistencies in the treatment of bidders and technical flaws in the franchising process.