Half of the incidents could have been avoided if staff had learnt the lessons of previous mistakes, a report by the National Audit Office (NAO) has found. The extra cost to the NHS of treating patients was £2bn. Most of the victims were kept in the dark, with only one in four trusts routinely informing patients and one in 16 never telling them anything.

The scale of safety errors is almost double that revealed in a smaller survey by the National Patient Safety Agency (NPSA), published in July, which estimated there were 572,000 errors and 840 deaths.

In a highly critical report, the NAO said progress towards improved reporting of errors and measures to correct them was too slow. The NPSA, set up in 2001, had taken two years longer than planned to roll out a national reporting system and by last August, 35 trusts had still not sent in any data. The aim was to create an open and fair culture in which staff felt able to report incidents from which the NHS could learn. But the NAO found that a blame culture still predominated in some trusts.

Edward Leigh, chairman of the House of Commons Public Accounts Committee, said the report's findings were shocking. "Each day, over one million people are treated successfully, and we all know that in the complex world of a hospital, things can go wrong. But no public health system should tolerate a failure to learn from previous experience on this scale," he said.

Mr Leigh said it was "unacceptable" that any NHS staff member should be afraid to report things going wrong. He singled out the NPSA for criticism, saying there was "limited evidence of any effective activity".

Karen Taylor, chief author of the NAO report, said 96 per cent of all 267 NHS acute, mental health and ambulance trusts in England had responded to the survey, revealing a total of 980,000 reported incidents and near-misses.

At least 20 per cent of incidents were estimated to go unreported and few trusts included hospital-acquired infections such as MRSA, which would add a further 300,000 incidents and £1bn extra in costs to the total figure.

Falls were most likely to be reported, with medication errors and adverse drug reactions the least likely. Estimates of deaths associated with hospital errors have ranged from 840 in the last NPSA survey to 34,000 in a study led by Professor Charles Vincent, a risk assessment specialist at Imperial College London. "The fact is they just don't know," Ms Taylor said.

Bill Kirkup, deputy chief medical officer, said: "The majority of these incidents are minor and have no lasting effect on patients. Regrettably some are serious. We must investigate and learn from all of them so that we can make systems safer and more reliable."

In a statement, the NPSA said the NHS had made "real progress" in reducing risk. Professor Sir John Lilleyman, the medical director, said: "Of course there is much more to be done and we are only beginning to see the benefits of investing in patient safety."