The BBC is abandoning its £98 million+ (€115m) digital production system, as new BBC Director General Tony Hall said it had “wasted a huge amount of licence fee payers’ money”.

The Digital Media Initiative (DMI), launched in 2008, was suspended after problems came to light late last year. “I have serious concerns about how we managed this project,” said Hall. He confirmed an independent review had been set up “to find out what went wrong and what lessons can be learned”.

The Digital Media Initiative was aimed at implementing digital workflow and the way staff developed, used and shared video and audio material and was seen as an important part of a move of resources to Salford. “Ambitious technology projects like this always carry a risk of failure. It does not mean we should not attempt them but we have a responsibility to keep them under much greater control than we did here,” Hall said.

An internal review of the project was first set up in October 2012 after the BBC Trust expressed serious concerns.

In a letter to Margaret Hodge, chair of the House of Commons Public Accounts Committee, the BBC Trust’s Anthony Fry revealed the project had generated “little or no assets. It is of utmost concern to us that a project which had already failed to deliver value for money in its early stages has now spent so much more of licence fee payers’ money,” he wrote.

The corporation said the initiative had been badly managed and outpaced by developing technology, and to carry on would simply be throwing good money after bad.

John Linwood, the BBC’s chief technology officer, has been suspended.

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