Permanent Secretary Sir Jon Shortridge told the assembly's audit committee the design submitted by the Richard Rogers Partnership (RRP) would not have been eligible for the original competition if the true costs had been known.

The committee heard the original estimate given by the company was too low.

If the true costs had been known at the time, [RRP's] entry should have been rejected from the competition as non-compliant Sir Jon Shortridge

The assembly originally put �12m aside for the building, but costs rose to �26.7m by November 2000, and a later estimate put the real figure at between �37m-47m.

Sir Jon said it was a "brave decision" to terminate the contract with the architect.

AMs questioned him over legal action taken against RRP to recover money which turned on its head when the assembly had to pay them �450,000.

The Assembly Government had launched a counter-claim against RRP after they initiated an adjudication claim for unpaid fees.

But the adjudicator in case ruled that Lord Roger's firm was entitled to a payment of �448,000.

Sir Jon defended the decision to take action against the firm, pointed to legal advice which pointed to the assembly being in a strong position to win the case.

He told the audit committee: "The fundamental problem with which we have been faced throughout this project is that the original estimate submitted by the Richard Rogers Partnership in the design competition is too low.

"If the true costs had been known at the time, their entry should have been rejected from the competition as non-compliant."

The assembly building design by Lord Rogers

He said there had been a "growing realisation" that the building could not be built for the price originally specified.

"When we finally lost confidence in the architect's capacity to meet our requirements on cost, we terminated the contract," the committee heard.

"That was, in the words of one of our professional advisors, a correct and brave decision.

..."We then used the fast-track adjudication route in an attempt to resolve the outstanding contractual disputes.

"We did not secure the outcome from that adjudication that we wanted and to which, upon the basis of all our professional advice, we considered we were entitled."

Sir Jon said the Auditor General's report had confirmed the assembly had been justified on "value for money grounds" in contesting the RRP claim.

He added that the adjudicator had ruled the assembly held the copyright on the design of Lord Roger's building, which the architect's firm had contested.