MPs have urged the government to abandon Capita in the development of new individual learning accounts after the company's "appalling failures" in delivering the first scheme.

Capita won a £50 million contract to run the ill-fated programme, which collapsed last year amid mounting allegations of fraud among learning providers and concern over costs that went £93 million over budget.

A report on an inquiry by the education and skills select committee criticised Capita, which boasts in its annual reports of experience in handling government projects requiring tight anti-fraud measures, for failing to point out that a lack of safeguards in the ILA system made it "a disaster waiting to happen".

In a House of Commons debate last week, MPs condemned old ILAs as "a cowboy's charter for the unscrupulous to plunder taxpayers' money", and demanded that Capita be excluded from a successor scheme expected to be announced later this year.

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Andrew Turner, Conservative MP for the Isle of Wight, said that in its response to the select committee's report, the government said that "a successor scheme will be a major test for Capita".

He added: "That suggests that it has already been decided that those who failed last time will get a second chance, which the private providers that have gone bankrupt will not get."

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Barry Sheerman, who chairs the committee, said the contract between the government and Capita "did not spell out the balance of risk and responsibility".