MI5 has become the latest government organisation to add to the casualty list of Britain’s failed multi-million pound IT projects.

The Independent has learned that a decision by the recently departed head of MI5, Sir Jonathan Evans, to abandon a new digital records management (RM) system will cost tax payers over £90m.

The new RM system was supposed to be in place last year to help MI5 deal with the increased threat of terrorism posed by the Olympics in London. Among the added IT expertise brought in were a team of expensive consultants from Deloitte. One of its aims was to integrate intelligence data and analysis across all the Government departments which feed into MI5. The old system was regarded as out-of-date and ill-equipped to deal with new global security threats.

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However, trials of the new system – with software intended to mesh intelligence gathering and searches of old paper archives with the latest digital technology – were put on hold over fears that if the project failed it could leave Britain’s spooks vulnerable and struggling with an intelligence vacuum. Post-Olympics, Sir Jonathan told MPs on the Commons Intelligence and Security Committee the performance of IT consultants would be improved.

The then director-general also said the temporary delay in the project was acceptable as the new system was not urgently needed. Earlier this year, the design and ambition of the digital records system was re-evaluated and the decision taken to admit failure and re-start with a new generation of IT specialists. Sources contacted by the IoS say the total losses incurred by abandoning the RM project after years of work and starting again will pass £90m.

A spokeswoman for the Home Office, which has responsibility for MI5, would not comment on the RM project’s demise other than to say: “We don’t recognise the £90m figure.”