The DTI has come under fire over its handling of the £300m National Physical Laboratory, the PFI project that brought down contractor John Laing's construction division.

A report published this week by the National Audit Office found that the DTI's failure to correct design errors made by consortium partners Laing and Serco led to the contractor's losses of at least £100m and a six-year delay.

The fiasco was, alongside losses at the Millennium Stadium in Cardiff, an element in John Laing's decision to sell its construction division to O'Rourke for £1 in 2001.

The report said the DTI had decided not to act on its concerns because it hoped the consortium would resolve them. It also wanted to keep the cost of the building off the public balance sheet.

In turn, the Laser consortium, made up of John Laing and support services firm Serco, failed to prove to the DTI that its design would work.

The centre, in Teddington, south-west London, was the first big PFI contract to be terminated for poor performance. In December 2004 the DTI paid Laser £75m to leave the scheme.

The NPL was due to be completed in 2001 but is not likely to open before next year. It is intended for research into measurement and materials science and to act as a standards body.

DTI has spent more than £140m on the project. Its total value was expected to be £130m when the contract was signed in 1998.

The report will increase pressure to speed through reforms to the PFI.