The Foreign & Commonwealth Office (FCO) has cancelled a £23m global IT project because it failed to sufficiently take into account the potential terrorist threat when it signed the contract - four months after the 11 September attacks.

Officials admit that, despite the worldwide publicity and huge hype about disaster recovery at the time, the 'ramifications of the attack took time to work through the system'.

Nearly £10m has already been spent on the global Focus knowledge management project, which covered an intranet, directory and database system linking FCO offices and embassies.

The business case was agreed in October 2001, and the six-year contract signed with Fujitsu Consulting in January 2002. It was cancelled at the end of March 2003 - after costs shot up to £42m - because it was felt the addition of disaster recovery would make the project too expensive.

'The scope increased because of September 11 - after that we appreciated the need for disaster recovery capability, which led to an increase in both hardware and complexity, and increased training and support costs,' said an FCO spokeswoman.

The FCO says the implications of the terrorist attacks were not immediately appreciated, and the lengthy buying process was already underway.

'The project went ahead because the whole round of tendering had gone through without the disaster recovery aspect and the ramifications of 11 September took time to work their way through the system,' said the spokeswoman.

Liberal Democrat IT spokesman Richard Allan: 'You don't need a September 11 to predict you need robust disaster recovery systems linking embassies in far-flung places where there are 101 ways they could be challenged and threatened. Once it's decided the tender is wrong or you don't want to proceed there's no excuse for taking over a year to conclude it.'

For the £9.5m already spent the FCO will keep the directory system, which it hopes will save £2.5m over the next five years, and an online discussion facility.