MPs on the Treasury Select Committee say there are "serious questions about how the department has been led."

IT problems were at the heart of the problem, meaning that EDS, the company responsible for the tax credit computer system, was also at fault.

MPs are urging the government to seek compensation for up to 220,000 people who still haven't got their child tax credit from EDS.

The report from the Treasury Select Committee concluded that thousands of families suffered as a result of the Revenue's struggles to cope with the administration of the new tax credit.

IT failure

"We believe that the Revenue and Paymaster General have a clear duty to pursue vigorously a compensation claim from EDS," the committee said.

"We do not expect the additional costs that have been incurred as a result of failure by EDS to be borne by the British taxpayer."

As a result of delays, the Revenue has made nearly 200,000 emergency payments, worth tens of million of pounds.

Overall, I believe we provide good levels of service to thirty million members of the public Inland Revenue spokesperson

In evidence given to the committee, Inland Revenue officials had claimed that IT problems in administering the five million claims for the credit had come as a "bolt out of the blue".

And the committee appeared to agree with the Revenue, saying the problems arose "at the last moment" and "without any warning".

The Inland Revenue confirmed that they were acting upon the recommendations of the Committee to pursue EDS for compensation.

However, an Inland Revenue spokesperson told BBC News Online that discussions with EDS were in their infancy and no figure for compensation had been agreed.

Lessons learnt

Overall, the Committee said it was clear that some applicants "have not received the service from the Inland Revenue that they were entitled to expect".

Dawn Primarolo, minister responsible for tax credits

At the beginning of July there were still some 220,000 applications that had not been resolved.

And more than 400,000 applicants had received their first payment of the new credit late.

"There have been teething troubles with the introduction of the credits but 90% of applicants got their money with no problem whatsoever," a Revenue spokesperson told BBC News Online.

"Overall, I believe we provide good levels of service to thirty million members of the public."

The Committee pressed for lessons to be learnt before the introduction of the Pension Credit in October.

The benefit, which offers a minimum guaranteed income for pensioners, could be open to an estimated four million households to claim.

The Pension Credit will be administered by the Department for Work and Pensions which is obtaining its IT from a consortium including EDS.