The government should consider using the Army instead of private firms for major future events, MPs found today.
The development comes after armed forces personnel successfully made up for potentially disastrous shortages of staff from private firm G4S.
Some suggested the firm's failure showed private firms were not necessarily more efficient than state-owned bodies.
MPs on the home affairs committee appear to have taken that message in board, with a report suggesting the government always consider army personnel for major events and set up a blacklist of 'high risk' private firms who fail to deliver public services satisfactorily.
"The G4S debacle showed clearly the risks of putting so much reliance on a private company when it comes to policing," shadow home secretary Yvette Cooper said.
"Yet Home Office ministers are still pushing for large scale contracting out of important public policing functions to a small number of private companies. Public comments from the defence secretary about rethinking the role of private companies in public services have not been repeated by the home secretary.
"It's time they ruled out using G4S to police Britain's streets."
The influential committee of MPs also demanded G4S pay for the repercussions of its failure instead of the taxpayer.
"Far from being able to stage two games on two continents at the same time, as they recklessly boasted, G4S could not even stage one," committee chair Keith Vaz said.
"The largest security company in the world, providing a contract to their biggest UK client, turned years of carefully laid preparations into an eleventh hour fiasco."
The cross-party committee's finding exonerates the government from any blame in the fiasco, which forced the Home Office to send army personnel to the Olympic park.
"The data the company provided to the Olympic Security Board was at best unreliable, at worst downright misleading," Vaz said.
"Twenty-four hours before they admitted their failure, [chief executive] Nick Buckles met with the home secretary and did not bother to inform her that they were unable to deliver on their contract, even though he knew about the shortfall a week before."
As well as forsaking its £57 million management fee, the firm was told to make ex gratia payments to applicants who completed training but were not given work because of its management failings.