Staff mistakes in a private laboratory may have caused 23 extra deaths from Covid-19.
The UK Health Security Agency (UKHSA) made the claim in a report into errors at the Immensa lab in Wolverhampton.
It said as many as 39,000 positive results were wrongly reported as negative in September and October 2021.
The mistakes led to "increased numbers of [hospital] admissions and deaths", the report, published on Tuesday, concluded.
Thousands of people, many in the South West, were wrongly told to stop testing after their results were processed by Immensa.
The Wolverhampton laboratory was used for additional testing capacity for NHS Test and Trace from early September 2021, but testing was suspended on 12 October following reports of inaccurate results.
Experts said high case rates in some areas were down to people unwittingly infecting others when they should have been isolating.
UKHSA experts said the mistakes could have led to as many as 55,000 additional infections in areas where the false negatives were reported.
"Each incorrect negative test likely led to just over two additional infections," the report said.
"In those same geographical areas, our results also suggest an increased number of admissions and deaths."
Immensa was paid more than £100m to carry out Covid testing for the NHS during the pandemic.
The UKHSA said a total of about 400,000 samples had been processed at the lab in Wolverhampton.
"The cause [of the mistakes] was the incorrect setting of the threshold levels for reporting positive and negative results of PCR samples for Covid-19," said the UKHSA.
"Based on background infection rates in different population groups at the time, UKHSA estimated that this error could have led to around 39,000 results being incorrectly reported as negative when they should have been positive."
Richard Gleave, UKHSA director and lead investigator, said: "We have concluded that staff errors within Immensa's Wolverhampton laboratory were the immediate cause of the incorrect reporting of Covid-19 PCR test results in September and October 2021.
"It is our view that there was no single action that NHS Test and Trace could have taken differently to prevent this error arising in the private laboratory."
Jenny Harries, UKHSA chief executive, said: "I fully accept the findings and recommendations made in this report, many of which were implemented as soon as UKHSA discovered the incident.
"These ongoing improvements will enhance our ability to spot problems sooner where they do arise."
When asked whether the UKHSA would be taking legal action against Dante Labs, the owners of Immensa, Dr Harries said: "The contract ceased anyway shortly afterwards and it clearly hasn't been renewed, there is a legal case proceeding and you'll understand I can't comment on that in detail, but it is fair to say we are pursuing or rights under the contract."
Dante Labs have been contacted for comment.
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