The report by the Senate Governmental Affairs Committee said there were fundamental failures by all the agencies involved to stop the leaks.

The BBC's Keith Miller reports: "Blame laid squarely at the feet of the Attorney General"

It blames investigatory mistakes at the very beginning of the case, legal misunderstandings and errors at all levels of government.

The FBI, Department of Energy and Department of Justice are all criticised for what the committee calls their poor handling of the matter.

The report says that the FBI failed to follow up reports of possible leaks and took several years to search computers which may have been used to pass documents to Chinese agents.

Much of the investigation focused on Taiwanese-born scientist Wen Ho Lee, who was fired from his job at the Los Alamos National Laboratory in March this year after being identified as the primary suspect in the case.

But he has never been charged and has denied leaking material to China.

Tragedy of errors

Republican Senator Fred Thompson, the Governmental Affairs Committee chairman, and Democratic Senator Joseph Lieberman said the FBI's investigation was "flawed from the outset" because the agency had several other suspects but failed to investigate them.

The report revealed for the first time that Wen Ho Lee failed a lie-detector test when asked if he had leaked secrets "to any unauthorised person" but no government agency followed up the results.

FBI Director Louis Freeh failed to talk to Janet Reno

At a news conference after the release of the report the two senators described mistakes and lapses in communication over three years that prevented the FBI from building a strong case against Mr Lee.

"The government's investigation was not a comedy of errors, but a tragedy of errors," Mr Lieberman said.

Mr Thompson said the FBI's investigation was "beset by communications failures and poor judgement".

The BBC's Andrew Roy in Washington: "Every government department involved...consistently failed"

Both senators said that considering the importance of the case Attorney General Janet Reno should have been much more involved and informed.

The report said it was "remarkable" that FBI Director Louis Freeh never contacted Attorney General Reno about the issue.

Ms Reno did become aware of the FBI's attempts to gain access to the computer in August 1997. She asked the deputy attorney general's office to investigate, but the office failed to report back to Ms Reno.

The FBI also had poor communications with officials at Los Alamos National Laboratory, which further complicated their efforts to search Mr Lee's computer.

In March, investigators finally gained access to his computer and found that he had allegedly transferred thousands of secret computer codes from highly secure computers at the lab to his unclassified office computer, which was linked to the Internet.