Holyrood: how vaulting ambition turned into a Scottish tragedy

The new Scottish Parliament building was intended as a monument to national pride and a unifying symbol of a country reborn. Instead, the "Dark Hole" or "Dewar's Dome" as it has been dubbed by critics has turned into an embarrassing money-pit for the executive and become the subject of intense controversy.

It began when Donald Dewar, the late first minister, insisted that the home of devolved Scottish politics would not be sited where everyone had expected – the old Royal High School building, at the eastern end of Princes Street, which had been converted into a debating chamber in anticipation of the failed 1979 referendum.

Nobody anticipated Dewar's stubborn refusal to use it when the overwhelming will of the Scottish people finally manifested itself in the wake of New Labour's 1997 election triumph.

Some said Dewar regarded the Royal High as a symbol of the nationalism he detested. Others that he was simply indulging his love of architecture. Either way, the First Minister was adamant. A redundant brewery site was purchased at Holyrood, in Edinburgh's Old Town, and Dewar declared an international competition to find an architect for the project, for which he estimated costs at £40m. The Conservatives and the SNP were sceptical, but the price did not look excessive for a first-class piece of design.

That was then. New problems arose as soon as the competition winner, the Catalan eclecticist Enric Miralles, revealed his initial plans. The allegedly consensual debating chamber looked like an elongated banana; the building itself like a pair of upturned dinghies abandoned among battered packing cases.

For Miralles, known for his brash designs, including Utrecht Town Hall, the archery pavilions for the Barcelona Olympics and Takaoka railway station in Japan, this was to be a "signature project".

The Parliament's presiding officer, the former Liberal leader Sir David Steel, refused to be impressed. He demanded a fact-finding tour of European parliament buildings and a thorough redesign. Miralles should have sensed the nightmare into which he was wading.

After Miralles's death from a brain tumour in July 2000, a close friend revealed that he had become thoroughly disillusioned with Scotland and its politicians. "He said they treated him like an engineer, not a creative person," said Julio Capella. "He was tired of their bureaucratic approach."

If Miralles was disgruntled, Scotland was becoming plain angry. The original estimate had risen to £109m in October 1999 and was hovering around £200m in April 2000, when MSPs gathered in their temporary home on The Mound to contemplate aborting the project.

Construction was horribly behind schedule, Sir David had appointed consultants to investigate the fiasco and Miralles was incensed by constantly changing design specifications. MSPs wanted bigger offices, more seats in the public gallery, expanded space for their staff and a more capacious press gallery. Parliament voted to continue building by a narrow margin, 66 to 57.

The consultants advised that the budget should be frozen at £195m – five times Dewar's misleading original prediction. For a few brief months, opinion formed up behind the scheme. This was Scotland's first parliament in three centuries. As long as it was done well, the investment was merited: future generations would appreciate the grandeur of Dewar and Miralles's joint vision.

Then, as if cursed, the whole scheme descended from crisis to abject farce when first the architect and then the First Minister died. Budget estimates expanded to £230m and nobody seemed to know when it might be completed.

Dewar had embraced the building as his own responsibility. His successor, Henry McLeish, was having none of it. Suddenly the great monument to national pride was "a matter for the Scottish Parliament, not the executive". Nobody wanted to be associated with what looked increasingly like a catalogue of amateurism and grandiose ambition.

As the costs have increased, so has concern about where the money to finish the project will be found. Last Wednesday it was reported that schools were to be starved of cash to finance completion of the project. That might be true.

Certainly the First Minister has limited financial leeway, having committed himself to a range of expensive policy pledges, including free personal care for the elderly, a massive hike in teachers' pay, support for Scotland's fishing industry and funding for a bid to host the 2008 European football championship.

Whatever the final figure, it is clear that Dewar's £40m estimate was a huge tactical error. He knew that figure would cover just the parliamentary debating chamber, not the building fees, site acquisition and parliamentary office buildings. He would have been wise to say so, but the father of the nation avoided candour on that topic and now his greatest physical legacy will be judged on hard practical grounds.

Scots are less likely to ask whether it makes the grade as a contemporary parliament building than to wonder what improvements to public services might have been funded if MSPs had settled in the slightly dowdy 1970s surroundings of the refurbished Royal High. That redesign cost less than one-tenth of the Holyrood scheme.