Ministers must keep a closer eye on big NHS building projects after incompetent local health chiefs caused the collapse of a £900m scheme, MPs have said.
The "super-hospital" would have merged three London hospitals
The public accounts committee said the government had left the Paddington Health Campus project to local managers who were "out of their depth".
The project, designed to merge three north-west London hospitals, was abandoned after costs rose by £300m.
The government said it had already introduced tighter checks on schemes.
The health complex in Paddington, which would have merged St Mary's, the Royal Brompton and Harefield hospitals, was approved in October 2001.
Health bosses thought it would be finished by 2006 but the projected costs more than doubled and the completion date slipped to 2013.
The North West London Strategic Health Authority withdrew the plans in June 2005 but only after £15m costs had been run up.
The MPs found that the Campus partners, overseen by the SHA which has now been scrapped, were imprudent in submitting a business case in 2000 which was "manifestly inadequate".
They said at that stage, health chiefs had not even consulted their own doctors and nurses and were thus unable to determine with any degree of accuracy the land requirements and likely costs.
The eventual collapse of the scheme can be traced directly to the ill-informed decisions taken at the outset by the NHS in north west London, the MPs said.
But the committee also said the Department of Health was to blame because it was "not adequately aware of the state of the Campus scheme" because it viewed it as a local issue.
MPs said this "hands-off" attitude must change with the other big projects in the pipeline.
Committee chairman Edward Leigh said: "The collapse of the ambitious Paddington Health Campus project after five years was the direct result of appalling planning and forecasting of costs by the NHS Trust partners, rows between them over the way forward and uncertainty over the Department of Health's degree of support for the scheme, which was lukewarm at best."
On the NHS managers in charge of the scheme, he said: "Their amateurism and incompetence in this field compounded the consequences of bad decisions made at the outset."
And he added: "The department's hands-off attitude towards large-scale capital investment projects must be abandoned in favour of closer and sustained scrutiny."
He said the government must order reappraisals of the current schemes which have risen in cost by more than 10%.
An spokesman for NHS London, which has replaced the individual strategic health authorities in the capital, said: 'We welcome the PAC report and are keen to learn lessons from it."
And a Department of Health spokesman added: "The department takes seriously the points raised by the PAC and has already taken action to learn the lessons of Paddington and ensure that every penny of extra investment in new NHS hospitals is spent wisely.
"The department now formally approves expensive schemes at outline stage, which should prevent such cases arising in future.
"We have tightened up checks on governance and project management, introducing an independent assessment of project risks and leadership arrangements, as well as tighter criteria for outline business cases to ensure tender costs are realistic."