The second phase of a government intelligence sharing system was scrapped because of problems with the un-named commercial supplier for the scheme, costing the taxpayer more than £24m.

The first phase of the Scope programme was delivered on time and within budget in 2007. The system enabled MI5, MI6, GCHQ and selected Whitehall departments to share information much more efficiently.

But the second phase - which would have provided added functionality - was cancelled following the failure of the main commercial supplier to the programme to meet key contractual milestones, Cabinet Office minister Tessa Jowell said in a written answer to Parliament.

"As a consequence of termination, it was necessary to write off and report as a loss in the annual report and accounts that part of the value of the asset under construction which had no prospect of becoming viable," she said.

Earlier this year the Intelligence and Security Committee expressed outrage at the decision to scrap Scope phase two.

"We have consistently reported concerns about Scope and are appalled that Phase II of the system – on which tens of millions of pounds have been spent – has now had to be scrapped," it said in a report earlier this year.

Jowell also said the Cabinet Office may pursue legal action against the supplier.

"My department is now working with the contractor to resolve issues arising from the termination of the programme, including consideration of the legal avenues available," said her written answer.