Theatre of dreams: Wembley

A former government minister and the FA have both been strongly criticised by MPs over failures to build two new major sporting venues.

The events leading up to the abandoning of plans to build the Pickett's Lock stadium in Enfield, North London for the 2005 World Athletics Championships were described as "sorry and convoluted" in a hard-hitting report published on Tuesday.

Members of the select committee on culture, media and sport made a series of uncompromising conclusions criticising most of the parties involved in both Picketts Lock and the new Wembley Stadium project which is also now in crisis.

Beginning by quoting Laurel and Hardy's "another fine mess" the MPs delivered a damning verdict of former culture secretary, Chris Smith, for taking decisions that were outside his ministerial scope.

The report singles out a deal between the former culture secretary and Chelsea chairman Ken Bates to arrange the handing back of £20 million in public money. The meeting took place at Smith's home, was agreed on a handshake with no civil servant present and the government is still waiting for the cash. A situation described by the MPs as a "scandalously inept treatment of public money".

Sport England were attacked for being "so slack and negligent" over the repayment that fell due when athletics facilities were withdrawn from the new national stadium in 1999.

The Football Association is carpeted for its handling of the development of a new Wembley stadium and for not giving back the grant from Sport England.

"It is deplorable that the FA has shown no intention of returning public money to which it has no right. The FA has at least a moral obligation to return £20 million to Sport England, " said the MPs.

The cross-party group of MPs savaged ministers for backing the bid for athletics championship.

"A national athletics centre at Picketts Lock was plucked out of the air by the government and then abruptly dropped. It is a saga of how government involved itself beyond its scope and powers in conjuring up a project that this committee judged unviable from the start. It is also a salutary lesson to Lottery award panels that they are not lucky dips but custodians of public money," the committee said.

Embarrassed UK athletics officials have been left to pick up the pieces following a series of farcical delays and the final blow in October the government announced it was pulling its support.

Ministers' official reason was that transport links and accommodation were not up to standard. The committee believes the project was ditched because "a secretary of state who was inexplicably wedded to the project [Chris Smith] was replaced by one who was not [Tessa Jowell]".

The new sports minister Richard Caborn said facilities at Sheffield would be adequate - forcing him to take the unprecedented step of begging the International Association of Athletics Federations to move the games. Unsurprisingly the request was immediately turned down.

The committee backed the decision to pull out but warned that the department had swapped one risk for another. but said there was no justification for its sudden shift from "confidence to alarm".On Wembley, the members described Chris Smith's decision to remove the athletics track from the plans for the redeveloped national stadium as "beyond his proper responsibilities" adding his decision had been "taken in a hurry, on flimsy and subjective grounds".

The committee concluded that if, as is likely, Sheffield is rejected by the IAAF the government should "consider seriously whether there is a last opportunity to return to the original strategy of a national stadium at Wembley for football, rugby and major athletics events".

"Without this it seems clear that there will be no venue for athletics in London capable of staging the World Championships, or the Olympics, and therefore little prospect of attracting these events to the capital for the foreseeable future. We believe that the original Wembley concept was, and remains, a highly commendable plan; knocked off course by hasty decisions arising from a lack of co-ordination between long term Olympic ambitions and more immediate priorities," the report said.

The committee called on the government to decide once and for all whether it wishes the UK to be a host for the larger sporting events. It said there were positive reasons to enter bids citing a home advantage for UK athletes; events being a facet of its wider sports policy, including the encouragement of grassroots participation; and as an element of the way the UK is perceived internationally.

Shadow sport secretary, Tim Yeo, said the end result was that Britain's international standing had been diminished.

"Seldom has a Labour controlled select committee condemned the actions of the government so roundly. Ministers' handling of the Picketts Lock fiasco has made Britain a laughing stock in sporting circles. Our hopes of hosting a major international event are now in ruins," he said.