PASSPORT officials said yesterday that their new North-East office will help avoid a repeat of last summer's crisis in which hundreds of people lost their holidays.

The Passport Agency has been severely criticised by MPs for the huge backlog of passport applications that built up during the summer because of problems with a new computer system.

The public accounts committee said officials made "deplorable" mistakes and did not learn from problems when an earlier system was installed in 1989.

The agency's lack of planning led to a 565,000 backlog of applications. About 500 people missed holidays between March and the end of June.

The backlog only began to fall when the Home Office introduced emergency measures to tackle the crisis.

The agency has pledged to learn from its mistake and has opened a new office in Durham City, which will employ 400 people when fully operational.

David Davis, the Conservative chairman of the committee, said: "We saw fiasco turn to farce as the summer progressed last year. The implementation of this major change was poorly planned and badly handled.''

The committee blamed Home Office officials for losing £10m of taxpayers' money because of the way the contract was drawn up.

There were doubts about the computer system, produced by Siemens Business Services and Security and Printing Systems, but officials pushed ahead with it.

The crisis cost the agency £12.6m but the company, which took over the running of the National Savings office in Durham, will only pay £2.45m compensation, the committee heard.

An agency spokesman said: "We are reasonably confident it won't happen again. We have increased capacity by 25 per cent and we have the new office in Durham which is beginning to produce passports."

He said the office, which opens to callers in October, "should give a significant increase in capacity."