A new pay contract for family doctors in England cost 1.76 billion pounds more than budgeted and has failed to deliver expected improvements in patient care, the government's accounting watchdog said on Thursday.

The salaries of partners in GP surgeries have soared 58 percent since the contract was agreed but productivity has fallen 2.5 percent a year, the National Audit Office (NAO) said.

The largest part of the overspend - measured between 2003 and 2006 - was due to an underestimate of how much doctors would earn through the contract's performance-related scheme, which pays practices more for meeting healthcare targets.

While there had been improvements in the care provided to sufferers of long-term conditions such as asthma and diabetes, the contract had failed to increase the low level of family doctors in some of the most deprived areas.

Karen Taylor, director of health audit at the NAO, said the contract, agreed in June 2003, had been poor for taxpayers.

"I think as far as the public and taxpayer is concerned, the benefits they should have been expecting to see have not materialised as yet to the extent they should have done.

"From their perspective, it's not a good deal for them."

The Conservatives said the government's negotiation of the GP contract had been "incompetent and hopeless."

"They made a basic error in not understanding what GPs were already doing and so underestimated how much the new contract would cost the taxpayer," said Conservative Health Spokesman Andrew Lansley.

The NHS Employers organisation, now responsible for contract negotiations, said the Audit Office's figures were misleading.

Acting director Alastair Henderson said the figure of 1.76 billion pounds referred to expenditure above the minimum the government had promised to invest in primary health care.

"Expenditure was in the end 406 million pounds or 2.8 percent above that actually allocated by the government for spending on the contract over a three-year period," he said.

Doctors' leaders at the British Medical Association said GPs were spending more time with patients while the work they did had become more complex.

"Before 2004 the UK's GPs were among the worst paid in the world," said Laurence Buckman, chairman of the BMA's GP Committee.

Health Minister Ben Bradshaw said the contract had succeeded in stemming the "haemorrhaging" of GPs from the NHS.

"Longer consultations, quicker appointments and being able to book ahead are improvements valued by patients," he said.