HS2 could cost up to £22 billion more than its previous budget and be delayed by as many as seven years, the company building the railway said.
A report by HS2 Ltd chairman Allan Cook stated that the original plans “did not take sufficient account” of the effect of building a high-speed line through areas that are densely populated and with challenging ground conditions.
He added that the project’s budget has “proved unrealistic”, but added: “At the same time the benefits have been understated.”
Mr Cook said the previous budget for HS2 was £55.7 billion but it could cost up to £78 billion, with both figures at 2015 prices.
It was due to open in phases, with the final sections from Crewe to Manchester, and Birmingham to Leeds, completed by 2033.
But the scheme is not expected to be completed until as late as 2040, Mr Cook added.
A separate review into whether to scrap the railway was launched by Prime Minister Boris Johnson last month and will be completed this autumn.