A £319 million PFI project aimed at upgrading the computers used in magistrates' courts is still not finished after more than a decade of work.

The National Audit Office issued a damning report on Wednesday which will be seized on by opponents of the governments private finance schemes.

The "Libra" project should have led to a national standard IT system for magistrates' courts, but two schemes collapsed during the 1990s.

New technology was designed to replace existing systems which do not properly allow information to be shared electronically with other courts and enforcement agencies.

After two failed projects in the early 1990s, the Lord Chancellor's Department decided in 1996 to issue a PFI contract for the scheme.

It should have covered IT infrastructure including PCs, printers and standard office software including email, together with a core application to support court work, case management, accounting and administration.

The NAO found that by the end of the tendering process the only bidder was ICl - now Fujitsu Services - which meant the department was "to maintain competitive tension throughout the procurement process".

The costs rose from an initial £146 million over 11 years in 1998, to £184 million over 10.5 years in December 1998.

Costs rose further to £319 million over 14.5 years in May 2000.

Difficulties in delivering the contract meant that in July 2002, officials and ministers signed a variation to the contract with ICL to deliver only the national IT infrastructure and office automation facilities, including a number of enhancements, at a price of £232 million over 8.5 years.

The head of the NAO, Sir John Bourn, said that other department's should learn the lessons of the Libra failures.

"Departments should take it as a warning sign that their proposed PFI projects may not be workable if few bidders show initial interest and others withdraw as the procurement process continues," he said.

"In a single tender situation, departments need to take special care to safeguard value for money, for example by developing a should cost model to assess the reasonableness of a bid. Up to date contingency plans should be in place on all major contracts so that there is a fallback position if and when a contract goes wrong."

Responding to the report, the head of the Court Service, Ian Magee, said the lessons had been learned.

"There have been considerable improvements introduced on Libra, including strengthening of the governance arrangements, better risk management, the use of external benchmarking and an external review under the gateway process. This has provided more effective controls," he said.

"We have also separated the delivery of the infrastructure from the design and delivery of the application. The new arrangement is designed to ensure the success of the programme while simultaneously placing appropriate risk with the respective providers and the department."