The Government Communication Headquarters (GCHQ) is to spend over £300m on moving its computer systems to a new building - seven-and-a-half times more than it predicted six years ago.
Moreover, the spy centre's original plans for the move would have left it unable to gather more than minimal signals intelligence for two years.
According to a report by the National Audit Office (NAO), GCHQ's original 1997 estimate for the technical transition was £40m. This involved a 'box move': shutting down each system, moving it to a new building and re-starting it.
The agency considered that any disruption would be acceptable.
But by 1998 the estimate had risen to £60m. And when GCHQ investigated its systems for possible millennium bug problems, it discovered that its network and equipment were in a more complicated state because of the evolution of its IT systems.
As the NAO noted: "A simple 'box move' into a new building would not be possible without unacceptable damage to continuity of services - in effect GCHQ would produce little signals intelligence for a two-year period."
As a result, in 1999 the estimated cost of the move had risen to £450m, with the transition spread over two years.
In order to cut costs, GCHQ will now phase the process. But it will still cost over £300m.
The NAO said the new programme would provide more continuity of service for intelligence customers, and as a result GCHQ will keep an old office operational until 2012. The agency expects the job to take 978 man-years of effort to complete.
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