A project to provide next-generation armoured vehicles to the military has been "a complete and utter disaster", a former top brass said.
Delivery of the Ajax light tank has been a "rocky road", a defence minister also acknowledged at Westminster.
The Government was tackled over the progress of the problematic £5.5 billion programme in the House of Lords.
The Ajax project, intended to provide a state-of-the-art fighting vehicle for the Army, has been running for 12 years and cost £3.2 billion but has failed to deliver a single deployable vehicle.
Originally intended to enter service in 2017, it has been repeatedly delayed, with problems including noise and vibration issues which injured soldiers testing the vehicles.
The Ministry of Defence agreed a fixed-price contract with General Dynamics for 589 Ajax armoured vehicles, but just 26 have been delivered and can only be used for training.
Speaking in Parliament, former head of the Royal Navy Lord West of Spithead said: "Ajax programme, no matter how much one dresses it up, has been a complete and utter disaster. It has been a real shambles."
Earlier, highlighting the litany of difficulties which have dogged the programme, Labour frontbencher Lord Coaker said: "Can the minister tell the House when all these vehicles will be delivered to the front line and at what cost?
"Do the Government still have full confidence in the programme or are they examining alternatives?"
Responding, defence minister Baroness Goldie said: "This has been a rocky road.
"To be honest, I think that where we have got to now represents a seismic leap forward – that is the successful conclusion of user-validation trials."
She added: "We are very clear that, while this is an important addition and an important vehicle for the Army, we will not accept anything that is not fit for purpose.
"We remain in close contact with General Dynamics and I think we can now see a way forward."
Former chief of defence staff and independent crossbencher Lord Craig of Radley pressed the minister over the welfare of the up to 300 personnel who may have been hurt during vehicle testing.
Lady Goldie: "When the problem emerged during trials, immediate action was taken, support was given, medical help was provided and monitoring continues."
She added: "Recently, it was made clear during the user-validation trials that no one was to feel under obligation to continue if they had concerns about health and safety and they were free to speak up. As far as I am aware, the trials were able to proceed without interruption."