The Government has cleared M&C Saatchi of blame for the problems that have engulfed the Millennium Dome at Greenwich.
Lord Falconer, the minister responsible for the ill-fated project, said the agency's work was overshadowed by negative media coverage of the Dome.
Falconer said: 'We banked, in part, on lots of publicity for the Dome that would not depend on advertising. But the ups and downs of the Dome depend more on editorial coverage than advertising.'
He said the advertising was not criticised directly by the hard-hitting report into the project by the National Audit Office (NAO), the public spending watchdog.
The report, which will be followed by another investigation by the Commons Public Accounts Committee starting this week, said: 'Despite the company's marketing efforts, there are negative perceptions about the Dome and a lack of awareness of its content.'
The NAO report said the company had originally set a relatively low marketing budget of pounds 27 million because it hoped massive free media exposure and word of mouth would sell the project.
This was increased to pounds 40 million after negative media coverage undermined people's confidence in it, and the company admitted that 'the Dome's content had not been explained or promoted effectively to potential visitors'.