The Ministry of Justice has ordered a review of the project to establish an IT system to track criminal offenders across the UK.
The three-year-old C-NOMIS system, run by the National Offender Management Service (Noms), was originally slated to cost £240m. But unions quoted in The Guardian said the estimate for the entire project had now nearly quadrupled to £950m.
C-NOMIS is a crucial system to the government's entire handling process of criminals from conviction onwards. It is intended to bring together data from the numerous regional criminal databases.
But the project, on which £155m has been spent so far, has run into a series of delays and a reported financial shortfall.
Roger Hill, director of the Probation Service, said that the original costing for the C-NOMIS programme had turned out to be "optimistic".
He added: "We have advised ministers that we will need to undertake a fundamental review of the work, to return to an affordable programme."
The u-turn on the project prompted the Conservatives' shadow justice secretary Nick Herbert to ask the comptroller general of the National Audit Office, Sir John Bourn, to investigate what he called "another lamentable failure by the government to deliver an IT project on budge and on time".
Herbert called it a "potentially scandalous mismanagement of public funds".
The government has said plans to make a decision over the next month as to the future of the system.
In May, the government began procurement for a police national database in a contract worth up to £600m.
The month after it was also announced that an online programme for tracking cases through different parts of the justice system would get a wider roll-out, following a successful pilot in Liverpool.