More money is being spent on running the Child Support Agency's enforcement unit than it recovers from fathers, it emerged.
The agency, which collects maintenance from absent parents for the upkeep of their children, retrieved £8 million last year but costs were £12 million.
A spokeswoman for the Department for Work and Pensions, responsible for the CSA, said while figures were accurate, they only accounted for money retrieved from the initial contact with the parent and did not take into account future payments made.
The CSA, which has its headquarters at Brierley Hill in the West Midlands, recently came under fire after Prime Minister Tony Blair admitted it was "not properly suited" to its job.
During a question time exchange with Liberal Democrat leader Charles Kennedy, Mr Blair said the Government was "looking urgently" at solutions to its cash problems.
The Prime Minister told MPs the CSA was an investigating, adjudicating and enforcement agency all rolled into one and that made it " extremely difficult" for it to operate cost-effectively.
He was responding to claims by Mr Kennedy that the CSA had "an appalling track record".
The CSA has been plagued by systems problems, with the result that many lone parents have not received payments they were due.
But Downing Street has played down suggestions that it may be scrapped, with its functions split between different bodies.
The new figures emerged from a parliamentary question asked by Conservative MP for Wycombe Paul Goodman.
A review of the agency is being carried out by its chief executive Stephen Geraghty and is due to report at the end of this year or early in 2006.
Mr Goodman, the shadow Work and Pensions Minister, said: "This is yet more evidence that the CSA is in a mess."
Resolution, an organisation of 5,000 lawyers who promote a non- confrontational approach to family law, described the figures as "tragic".
James Pirrie, chair of Resolution's CSA committee said the CSA had failed to use its " devastating powers" to ensure compliance.