A skewed focus on technology over market analysis led to the failure of a scheme to offer UK university courses online, MPs have said.

The e-University (UKeU) was scrapped last year, having attracted only 900 students - the initial target was 5,600 - at a cost of £50m.

The Education and Skills Committee highly-critical report into UKeU, concluded that the main reason for the scheme's collapse was its failure to research potential customers' needs focussing instead on expensive IT plans.

'A supply-driven approach, combined with the very ambitious nature of the venture in an emerging market that did not sustain the high expectations of demand, and an inability to work in effective partnership with the private sector, led to the failure of UKeU,' the report states.

Initial business plans forecast a £110m profit over 10 years. However the report says that there was a "skewed focus" on technology, with the view that this would lead to high student uptake.

UKeU also failed to attract significant private investment, despite this being a condition of government funding.

There was also no direct accountability to a government minister, which the committee said gave UKeU "too much freedom to spend public money as it wished".

Liberal Democrat MP and committee member Paul Holmes said the online university was an example of the government being adventurous.

"The government tends to believe it can't go through the public sector because we need cutting-edge innovation. Once again, the taxpayer has had to pay," he said.

The report warns that the government should learn lessons from the failure of UKeU, but not be scared off investment in innovative schemes.