Criminals are escaping justice because courts are still using technology incompatible with modern security cameras.
CCTV systems record on to DVD - but courts and prosecutors have only video players.
Delays in transferring evidence from the digital discs to VHS tapes have led to cases being dropped or dismissed, government auditors said.
The National Audit Office (NAO) said it had examined 167 unsuccessful cases in magistrates' courts and six were due to CCTV images being on incompatible formats.
Shadow Home Secretary David Davis said it "beggared belief" that cases were being lost for the sake of a £20 DVD player.
The NAO report reveals: "Problems arise because the courts, most Crown Prosecution Service (CPS) offices and the defence solicitors use standard VHS video equipment, whereas most CCTV footage is now on DVD.
"In order for a case to progress the police have to obtain the evidence, arrange for it to be reformatted and provide copies for the Crown Prosecution Service and the defence."
It added: "This evidence needs to be available with the full file as it is often conclusive, leading either to early guilty pleas or to early dismissals, thus avoiding the additional cost of a trial."
A spokesman for HM Courts Service said: "CCTV footage comes in a variety of formats, including multiplex, which is highly technical to convert.
"We are aware of the issue and are working closely with other players to ensure that CCTV can be reformatted and played in court."
A CPS spokesman said: "It generally works well in our 42 areas, but there are logistical problems involved with switching to a new system."
Mr Davis said: "It beggars belief that criminals are going unpunished because courts are not being provided with a piece of equipment you can pick up on the high street for less than £20.
"No wonder confidence in our criminal justice system is so low.