HUGE overpayments which caused hundreds of thousands of families financial problems during the first year of Gordon Brown's flagship tax credit system appear to have been repeated in the following 12 months, according to a report published yesterday.

The chairman of the influential House of Commons Public Accounts Committee said yesterday it was "deplorable" that the £2.2bn overpayment - which is clawed back by HM Revenue and Customs (HMRC) - should have occurred two years in succession.

Edward Leigh said that the cycle of overpayment and clawback was an inevitable part of the way the credit scheme was devised, but the Government had failed to anticipate that it would happen on such a large scale.

HMRC has paid out about £15.8bn in child and working tax credits to five million families in 2003-04 and a similar amount in the following year.

But in each year, about £2.2m was overpaid to about 1.9 million families - more than double the amount expected when the system was set up.

In many cases, repayments were required because the claimants' circumstances had changed.

However, in others mistakes were due to official error or fraud by claimants.

Because of the difficulties, many of the country's poorest families faced repaying money which had already been spent, so HMRC has made provisions to write off debts worth around £1bn.

"An element of overpayment to claimants was an inherent part of the design of the tax credits system," said Mr Leigh.

"What came out of the blue for the Government was that overpayment would routinely occur on such a gigantic scale.

"This is a deplorable situation for the hundreds of thousands of vulnerable families who have to find money for repayments."

Yesterday's report found that the recovery of overpayments had caused real hardship to many families.

Mr Leigh raised doubts over the extent to which the problems with the tax credits would be resolved by changes introduced in last autumn's pre-budget report.

The threshold below which increases in income will be disregarded has been increased from £2,500 to £25,000 to cut the number of claimants whose entitlement changes when they are recalculated annually.

Claimants have also been given increased responsibilities to tell HMRC promptly about any change in their circumstances.