LONDON – A $14 billion program to give Britain's armed forces a new computer system is 18 months behind schedule and $360 million over budget, a government spending watchdog warned on Friday.

The new Defense Information Infrastructure is supposed to replace the 300 computer systems being operated by the armed forces and Ministry of Defense with a single system.

The National Audit Office said concerted action was needed to get the program back on track after it ran into difficulties.

The new system is being built by the Atlas consortium led by U.S. computer firm EDS and will eventually deliver 150,000 computer terminals at more than 2,000 locations, including Royal Navy warships.

The first stage was meant to deliver 62,800 terminals by July 2007 but only 29,000 have been installed so far.

The audit office said delays are partly caused by problems with asbestos and regular power supplies in some of the military sites where they are being fitted.

“As the report brings out, we still have some problems to overcome in rolling out the system completely, but we are working hard to overcome these,” said senior Ministry of Defense official Bill Jeffrey.