An investigation into false claims of murder and child sexual abuse against public figures could cost the Metropolitan Police £4m.
Operation Midland was sparked by Carl Beech, 51, who made claims against Tory MP Harvey Proctor, among others.
Beech, 51, of Gloucester, was jailed for 18 years in July for perverting the course of justice and child sex abuse.
On Wednesday the London Assembly Police and Crime Committee heard the investigation bill could hit £4m.
The hearing was told that so far the Met Police had spent £2m, while a further £900,000 racked up by Northumbria Police investigating and convicting Beech would be charged to the Met.
In addition, former Conservative MP Harvey Proctor is suing the force for raiding his home and if successful it could cost the Met a further £1m.
The homes of D-Day veteran Lord Bramall and Lady Diana Brittan, the widow of former home secretary Leon Brittan, were raided after acting on Beech’s claims.
Giving evidence to the committee, the Met’s deputy commissioner Sir Stephen House said investigating officers may have “overcompensated” because of past failings into sex abuse.
He said: “Because of criticism that we had failed to investigate properly, officers may have overcompensated and could have been more forensic in their questioning of the complainant when he came forward.”
In the wake of the investigation, the force commissioned a review by retired High Court judge Sir Richard Henriques who did not find any evidence of misconduct.
Sir Stephen said the Met was talking to Mr Proctor and the family of Lord Brittan and would publish a report with recommendations.
“We made mistakes and it has damaged people’s lives, and people who have given a huge amount of public service,” he said.