Fujitsu Services's £896m NHS IT contract was terminated because of the company's inability to deliver "key milestones", the government has claimed.
Health minister Ben Bradshaw said Fujitsu was unable to fulfil vital elements of its "core contract" to provide part of the £12.7bn National Programme for IT (NPfIT).
In a written answer to parliament, Bradshaw disclosed that the project suffered from far deeper problems than previously revealed.
He said Fujitsu "failed to meet key contractual milestones in the core contract and failed to provide an acceptable remediation plan".
Bradshaw said talks had been going on since last summer. The vendor was responsible for delivering the electronic care records system in the south of England.
Fujitsu has previously said the sticking point in these negotiations for a contract reset were disagreements over attempts to tailor the one-size-fits-all system to local health-trust needs, but Bradshaw said there were wider problems.
Bradshaw said talks also focused on the need to "address areas of poor product and delivery volumes, with the aim of resetting the contract to resolve these difficulties".
Bradshaw said the consequences of the termination were not yet clear but said they were expected to be "minimal".
Fujitsu declined to comment.
It recently emerged that Fujitsu has until the end of June to pay back £67m out of the £143m it received from the NHS in advance payments.
BT is thought to be the frontrunner to take over the eight sites that Fujitsu had been responsible for.