The man who spearheaded a failed American spy satellite programme that lost an estimated $4 billion has described it as “technically flawed and unexecutable the day it was signed”.

In an interview that will damage further the credibility of America’s surveillance capabilities, Robert J. Herman told The New York Times that the project had been doomed to failure because the US Government was unwilling to invest the necessary capital. At the same time, he alleged, Boeing, the contractor, made promises that it could not keep relating to the price and feasibility of the project, known as Future Imagery Architecture (FIA).

From 1979 to 1981, Mr Herman ran the National Reconnaissance Office (NRO), the government agency that oversaw the plan to create a new generation of spy satellites to keep better tabs on terrorist training camps, nuclear weapons plants and enemy military manoeuvres.

Mr Herman, who in 1996 led the panel that first recommended the establishment of a new satellite system, told The New York Times: “The FIA contract was technically flawed and unexecutable the day it was signed. Some top official should have thrown his badge on the table and screamed: ‘We can’t do this system at this price.’ No one did.”

Thomas Young, a former aerospace executive who led a panel that later examined the project, agreed with Mr Herman, saying that “the train wreck was predetermined on Day 1”. The projected cost of the programme, given a budget of $5 billion, was increased to between $7 billion and $8 billion in 2002 as the difficulties of execution became increasingly apparent.

By the time that it was finally killed off in September 2005, nowhere near completion and already a year after the first satellite was to have been delivered, the estimated cost had jumped to $18 billion.

The New York Times estimates that the Government lost at least $4 billion on the failed project, which an internal assessment by the NRO concluded in 1998 - just before the project went out to tender - was unrealistic in terms of budget and schedule. Boeing had never built the kind of spy satellites that the Government was seeking. However, it won the business because it promised to meet the spending caps imposed by the NRO under pressure from Congress, Mr Herman contended.

Ed Nowinski, an engineer who spent 28 years at the CIA, led the project for Boeing. Recalling the moment that his team won the contract, on September 3, 1999, he said: “The room was momentarily silent. We hadn’t really expected to win the whole project. We figured we’d be lucky to get the radar system. I was stunned.” Mr Nowinski, who was dismissed by Boeing as the project descended into chaos, likened it to “a perfect storm” and conceded that the pressure to keep costs unrealistically low compelled him to sugar-coat the situation.

He said: “Look, we did report problems, but it was certainly in my best interests to be very optimistic about what we could do.”

Keith Hall, now a vice-president of the consulting firm Booz Allen Hamilton, was the NRO executive who was responsible for Boeing’s appointment. “If I had to do it over again, I should have decided at the time that the cost cap was levied that we would just keep building what we had been building,” Mr Hall said, alluding to work already being done by Lockheed Martin, a Boeing rival. “I shouldn’t have allowed it to go forward.”

Boeing and the NRO declined to comment.

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