The high-speed rail network HS2 cannot be completed on its current schedule and budget and will be delayed beyond 2033, the government has said, blaming mismanagement by the previous Conservative administrations for the overruns.

The transport secretary, Heidi Alexander, told parliament there was “no reasonable way to deliver” on the 2033 target for the first trains to run between London and Birmingham, after receiving a bleak assessment from the new HS2 Ltd chief executive, Mark Wild.

In a letter to Alexander, Wild said the “overall situation with respect to cost, schedule and scope is unsustainable”. He suggested the government would have to come down hard on contractors and renegotiate the engineering contracts awarded in 2020, or costs would continue to rise.

He also said assumptions about future timelines were wrong and that the testing phase alone would be likely to take three years rather than 14 months.

Alexander said it would be several months before she could confirm an updated schedule for completion or cost for the project. She also said she was “drawing a line in the sand”, detailing what she called a “litany of failure” since the coalition government took on the project in 2010.

The government published the findings of a review it commissioned last autumn into the troubled scheme, alongside the letter from Wild outlining steps for a “reset” of construction.

Wild said HS2 Ltd had spent a year trying to “stabilise” the main works civil contracts [MWCCs] awarded in 2020 without success, and that “the nature of the contracts is such that the programme bears the vast majority of the financial risk [and] they will continue to rise without intervention”.

“Regaining control of the MWCC will involve a challenging negotiation and may require robust action in support from government,” he said.

Wild suggested that to minimise delays, the new line could initially have trains running at slower speeds – thought to be 200 rather than 225mph – and without the installation of automatic train operation until enough services run to require the enhancement.

Alexander said Wild had been told to build the line as safely and cheaply as possible, even if took longer. She said: “We won’t reinstate cancelled sections we can’t afford. But we will do the hard and necessary work to regain public trust and build this line.”

She told MPs the last government had mismanaged HS2 in numerous ways, including signing contracts against advice and repeatedly changing plans for redesigning London Euston station.

“Billions of pounds of taxpayers’ money has been wasted by constant scope changes, ineffective contracts and bad management,” she said. “It’s an appalling mess. But it’s one we will sort out.”

Alexander told MPs that among the mistakes made by the Conservative government was the decision to sign the 2020 contracts, despite having been advised by a review that year not to do so until the scope of the project had been fully decided.

The government-commissioned review by the infrastructure industry veteran James Stewart into what went wrong and lessons for future projects, which was published on Wednesday, also identified the contracts as an issue. “Cost overruns on the MWCCs are by far the most significant contributors to the overall cost increases,” he said.

Stewart’s report also said political decision-making had been a large factor in cost and then delay, with HS2 Ltd not having a “buffer” from government, making it “subject to evolving political aims, which pushed forward on the schedule before there was sufficient design maturity and caused progressive removals of scope”.

He attacked what he described as a “culture of gold-plating … evident on HS2”. “The top-down vision of building a railway that would be the best and fastest has been a major factor in undermining attempts to introduce a culture of cost control,” he said.

Alexander said the review showed there had not been sufficient ministerial oversight. “There have been too many dark corners for failure to hide in,” she said.

She revealed that the cost of commissioning two sets of designs for a new station at Euston, both rejected, had been more than £250m.

Soon after the northern arm was axed, the then prime minister, Rishi Sunak, announced a ministerial taskforce to oversee improvements to the station. That committee was to have included ministers from the Treasury, and the transport and levelling up departments. “Unbelievably, that taskforce never met,” Alexander said.

She said there would be a “new era of leadership” to get the project back on track, including the appointment of Mike Brown, a former commissioner of Transport for London, as the new chair of HS2 Ltd.

Alexander worked with Brown and Wild when she was deputy mayor of London. Wild carried out a similar role to his current one when he worked with TfL on the Elizabeth line, eventually completing it successfully within a revised timescale and budget.

She told MPs: “Mark and Mike were part of a team with me that turned Crossrail into the Elizabeth line. We’ve done it before and we’ll do it again.”

Responding to questions, she said: “It will be a number of months before I am in a position to confirm with any certainty the schedule and estimated final costs.”

Wild’s assessment, however, appears to indicate that HS2’s opening, even on a reduced scale, will be pushed back for two years or more.