"Weak" IT systems are hampering the payment of farming subsidies, according to MPs on the Public Account Committee.
The Rural Payments Agency overpaid farmers by a total of £37m in 2005 and 2006. Over half of farmers' payments in those years were incorrectly calculated, partly because of poor IT, a report on the Single Payment System (SPS) found.
Committee chair Edward Leigh said that many farmers have still not been told when they will have to repay the money, or by how much.
"Restoring farmers' confidence will depend on the Agency's improving its business processes and IT systems to the point where it can process claims efficiently and promptly and tell farmers when they are likely to be paid."
The cost of the project now exceeds £300, £50m more than originally planned.
"The Agency's service to farmers is still undermined by weaknesses in its IT systems, such as its inability to provide farmers with a predicted amount and payment date to assist them with their financial planning," the report said.
The Department for Environment, Food and Rural Affairs (DEFRA) "chose to implement the most complex option of reform in the shortest possible timescale," the PAC concluded. The Agency "badly underestimated the scale of the task".
This led to delays in making payments to farmers, erroneous payments and additional project and administrative costs.
The UK government may now be fined hundreds of millions of pounds by the European Commission for failing to properly implement the scheme, the PAC said.
The report is the second PAC report to criticise the system.
The SPS is a farming subsidy paid according to how much land farmers own. In 2005 it replaced subsidies that paid farmers according to what they produced.