Mistakes in calculating benefit payments cost taxpayers £80m last year, according to a government watchdog.

The National Audit Office calculated the total bill for errors in income support and job seekers allowance payments at £870m.

Most of the mistakes were over-payments, though under-payments of £210m were also recorded.

Inadequate computers and an over-complicated system are being blamed.

But the audit office acknowledged that progress was being made on preventing fraud.

And Social Security Secretary Alistair Darling vowed that new measures to cut down on errors and fraud would save more than £1bn by 2002.

Mr Darling revealed plans for a publicity campaign against benefit cheats which will begin this year.

The plan includes TV advertisements which will say benefit fraud is not a victimless crime because it means less money for schools, hospitals and other priorities.

Mr Darling said the cost of fraud and errors highlighted in the audit office report was "totally unacceptable".

But he went on: "We inherited a flawed system and it has taken time to put it right.

"In the past not enough was done to reform the creaking system which allowed fraud to flourish."

He said the new advertising campaign aimed "to shift public attitudes and promote intolerance of those who defraud the benefits system".

He said: "We want to change the public's attitude to benefit fraud in the same way as it has changed towards drink driving."

"We are taking a 'zero tolerance' approach to fraud. Those con-artists and criminals who have regarded the benefit system as a soft touch will be identified and punished."

Teams of experts will also be sent into benefits agency offices in an attempt to reduce errors.

Call for local budget control

But Frank Field, the former welfare reform minister, called for local control of budgets in a bid to tackle fraud.

He said this would lead to a significant reduction in benefit fraud and an improvement in service for ordinary claimants.

"This would not only ensure that when staff needed to spend more time with somebody signing on for benefit they could do so for good reasons.

"You want to make sure they are paid the right money and also ... to make sure that the wrong people don't get into the system," he told BBC Radio 4's World at One programme.

"I can't see where the counter-fraud programme is going. I know the phrases are there. But I neither understand at a global level what's happening and I certainly would be confused at a local level."

Mr Darling brushed aside the criticism: "Frank did look at this but couldn't solve some of the practical problems you get if you have a different social security regime in each town.

"We are taking steps to cut down on the amount of error in the system."