Costs could rise by 123%

Converting Crickhowell House was originally estimated at �5m - it is now likely to reach �11.5m.

The report said that was because the original budget was completely inadequate, because extra requirements were added in by politicians.

More accommodation was also needed than first thought, and senior officials were not sufficiently involved in monitoring costs.

But Ron Davies - who as Welsh Secretary made the decision to locate the Assembly in Cardiff Bay - denied the budget was too tight for effective control.

But his successor Alun Michael, suggested costs were almost bound to rise.

The new building was originally estimated at �12m, but is now likely to cost �23m.

The report praised the way Assembly officials were now monitoring costs.

'Serious questions'

But it criticised the arrangement which gave the architects, the Richard Rogers partnership a fee which goes up with the cost of the building and now stands at about �3.5m.

The report said that gave them no incentive to keep costs down.

"There have been substantial cost increases on this important project. In large part these are due to changing requirements," said Sir John Bourn.

"There were some weaknesses in project management at the initial stage; arrangements have been strengthened for the new building."

Welsh Conservative leader Nick Bourne - speaking before the report's publication - said the Tories had been opposed from the beginning to spending millions of pounds on an extension to the building.

'Lack of diligence'

Plaid Cymru President Ieuan Wyn Jones has said the whole episode raised serious questions about the way Labour had handled the project.

"It does not inspire confidence in the Labour's administration's ability to monitor the spending of public money and they should apologise to the people of Wales for their lack of diligence," he said.

The report also urged the Assembly to employ its own quantity surveyor to monitor costs, rather than rely on one already employed by the architects - an arrangement described as "very unusual" by accountancy experts and even by Ivan Harbour of the Richard Rogers Partnership.

Because the report will go to the Assembly's audit committee next week, the First Minister Rhodri Morgan declined to comment.

But an Assembly spokesman said the report recognised the good job done by the Welsh Office in getting Crickhowell House ready in time and that they would be eager to put into effect any lessons learnt.

He said the cost of the new building had not increased since it was debated and approved in July.

The Assembly's Audit Committee will consider the report on 9 November.