There was insufficient time to test a new IT system which then proved "unstable" when it went live, the report by the National Audit Office (NAO) said.

DfT staff told the NAO that people were being recorded as sick when they were not and that the information being produced was "garbage". Mix-ups led to one employee losing nine days' annual leave and others getting messages in German, the report revealed.

One member of staff said that before the new system was put in place the department achieved a prompt payment-to-suppliers target of 98% but this was now around 60%.

Commenting on the report, Edward Leigh MP, chairman of the House of Commons Public Accounts Committee, made a reference to the civil service chief in the BBC TV series Yes, Minister.

Mr Leigh said the DfT "has managed to implement an efficiency drive that would have been familiar to Sir Humphrey Appleby".

And NAO head Tim Burr said: "It is disappointing to see a programme which aimed to improve the efficiency and effectiveness of a department leaving it -on current projections - some £80 million worse off."

The NAO report said the DfT had planned to increase the efficiency and effectiveness of services such as human resources, payroll and finance.

The department forecast that the programme, which involved delivery of a new IT system from IBM, would cost £55 million and achieve gross savings of £112 million.

The NAO said that in practice, the DfT could not agree a common set of business processes and the initial estimates proved optimistic. Supplier relations could have been better and inadequate testing of the system led to an unstable IT system being introduced.