A cross-party committee of MPs has attacked the Ministry of Defence over the construction of nuclear submarine facilities at Devonport.

The inquiry was instigated after the project at the Devon dockyard ran almost £300 million over budget.

The Ministry of Defence initially suggested that the spending was essential to meet nuclear safety rules but the new report challenges that claim.

A failure to examine the implications of the nuclear regulatory regime and poor management of the project led to "delay and extra costs", the Commons public accounts committee says.

"The department had the vital role in ensuring that all key stakeholders understood each other's requirements and it should have got the main parties to work together from the start," said the report.

"In future departments should engage quickly with all key parties and explicitly agree roles and responsibilities, setting these out in a memorandum of understanding."

The MoD's experience on other nuclear projects "should have alerted it to the risk of significant cost increases" arising from the need to meet nuclear safety standards.

"Despite using expensive advisers, the department did not establish in advance how the regulatory regime and the nuclear standards would apply in detail to this project. The department should have established much more precisely what the practical application of these standards entailed," warned the committee.

Defence officials also failed to adopt realistic attitude to risk transfer, the MPs concluded.

"There was a strong possibility that risks might return to the department if significant problems arose," the committee noted.

The powerful committee argued that the MoD did not respond to warnings that DML, the prime contractor, would be unable to shoulder cost overruns.

"DML did not have the financial capacity to meet large cost overruns and had limited its liability under the contract - a fact we highlighted in 1999," said the report.

"The department failed to recognise these risks and presumed that the prime contract transferred significant risk to DML, a fundamental mistake.

"Before placing contracts, departments should consider explicitly the probability and impact of those risks that might return to them."

The PAC recommended that departments need to take "a more sophisticated approach" when deciding on the degree of their supervision of a project.