The National Audit Office pointed to "serious delays" in applying new software for the National Programme for IT in the NHS and said the Government had underestimated the challenges involved.

In a progress report, the NAO concluded that while all elements of the £12.7bn programme were advancing and some were complete, the original timescales for the Care Records Service – one of the central processes – were "unachievable, raised unrealistic expectations and put confidence in the programme at risk".

In particular, the software planned for the North, Midlands and East areas, called Lorenzo, has taken much longer than planned, forcing some trusts to take an interim system, the report found.

The information technology programme involves four main projects: A centralised electronic medical record system for 50 million patients; an online "choose and book" system for booking hospital appointments – deployment of which, according to today's report, is nearly complete; electronic prescriptions; and fast network links between NHS organisations.

It is expected to link more than 30,000 GPs in England to almost 300 hospitals.

But it has come in for repeated criticism, including from committees of MPs, over the delays as well as fears over the security of patient information.

Contractual agreements that money would not be paid to suppliers until the systems were in place, mean the delays have not pushed up the estimated cost of £12.7bn, the NAO said.

Actual expenditure to the end of March 2008 was lower than expected at £3.6bn because many trusts missed planned "go live" dates.

The report added that it was essential that NHS staff were convinced of the value of the programme in order for it to succeed.

According to a survey by the Department of Health last year, 67 per cent of nurses and 62 per cent of doctors expected the new systems to improve the care of patients.

Tim Burr, head of the National Audit Office, said: "The scale of the challenge involved in delivering the National Programme for IT has proved to be far greater than envisaged at the start, with serious delays in delivering the new care records systems.

"Progress is being made, however, and financial savings and other benefits are beginning to emerge."

A Department of Health spokesman said: "The Department regrets that one of the elements of the programme, the care records service, is taking longer than was published as a tentative timetable in 2002.

"We have said before that this is due to a mixture of technical complexity and to allow further time for consultation and the development of the Care Record Guarantee, to meet the concerns that patients may otherwise have felt about the confidentiality of their records."