Nobody involved in the building of the British Museum's Great Court south portico in French rather than Portland limestone comes out of it too well in a Price WaterhouseCooper report instigated by Chris Smith, Secretary of State for Culture.

Unclear demarcation of responsibilities and lines of communication by the museum are blamed for a slow response to a tip off in March 1999 that Portland stone was not being used. At that time the architects, the Museum, English Heritage and Camden Council, the planning authority, thought Portland was being used.

PricewaterhouseCooper found that when Mace, the contract managers, contacted Easton Masonry (Portland) Co Ltd, the stone contractors for the south portico, about the tip off, Easton denied the charge that they had substituted the stone.

They continued denying it and invoicing the Museum as if the stone were Portland until they were faced with the results of scientific tests on 29 June 1999.

In the view of the PricewaterhouseCooper report, the fact that Easton Masonry's contract price of £1.74million for the portico was £1.2million less than the next lowest bid, and a drawing out of Easton Masonry's financial position during the tendering process should have constituted a warning to the Museum and its professional advisors.

Easton Masonry also failed to provide Mace with a performance bond, in breach of the Museum's internal control procedures. Other specialist contractors failed initially to provide bonds, although they were provided in response to retentions. Easton did not respond to retentions by providing a performance bond.

As a result of the retentions the Museum has withheld £370,000, which the report says is likely to be offset by costs incurred by the Museum and other contra charges.

The report says: "In the opinion of the Museum's legal advisors, the Trade Contract entered into by Easton Masonry was for Portland stone and Easton Masonry is in breach of its Trade Contract. We understand that Easton Masonry does not accept this."

The architects, Foster & Partners, told the investigators that there was "calculated and persistent deception" by Easton Masonry. The report notes, however, that if Easton Masonry's quality plan had been followed, the use of incorrect stone might have been prevented or at least discovered at an earlier stage.

The report says: "We understand that the Museum has faced charges from some external commentators that there was a cover-up or a deliberate attempt to withhold information from Stakeholders. We have found no evidence of that."

It adds, however: "There have been certain inconsistencies in the recollections which we have been unable to reconcile."

The report says management and governance changes have taken place at the Museum since this incident. "We have been told by members of Management and Trustees that these have resulted in improvements in working arrangements and greater clarity in the roles of Management and Trustees."

Response by Easton Masonry (UK) Ltd 

Stephen Mold, the Managing Director of Easton Masonry UK Ltd, which occupies the site of Easton Masonry (Portland) Ltd, the contractors involved in the south portico, says of the matter: "I specifically made no comment about it to anybody and I wouldn't break that now because it's nothing to do with me."

He says the British Museum contract was the last carried out by Easton Masonry (Portland) and that Easton Masonry UK has a completely different board of directors and a completely different philosophy. "The whole idea is to sort projects out so people get what it says on the can – you get exactly what you set out to achieve," says Stephen Mold.

He adds: "We have kept the same management because they're a bloody good team and kept the same operatives because they're the best on the island."

Easton Masonry UK say they employ 55 people at their works on the Dorset island of Portland and a similar number of people on site at the projects they have won.

The Portland MP has said that Easton Masonry should not be made scapegoat for the use of French stone instead of Portland stone for the Great Court South Portico. Read his comments here.