Ministers, military commanders and civil servants engaged in a "massive act of collective self-delusion" about the prospects for success in Afghanistan, a former UK diplomat said.
Sir Sherard Cowper-Coles, a former ambassador in Kabul and special representative for the foreign secretary in Pakistan and Afghanistan, also criticised civilian officials and ministers for lacking the "moral courage" to stand up to military top brass about plans for the country.
He criticised the lack of military knowledge among ministers in the Labour administration, with one politician admitting they did not "know the difference between a Tornado and a torpedo", and said they were kept in the dark by briefing documents written in almost incomprehensible defence jargon.
Sir Sherard was ambassador in Kabul from May 2007 until April 2009 and was foreign secretary David Miliband's special representative in Afghanistan and Pakistan.
"There were times in Afghanistan when I felt that both in the Ministry of Defence (MoD) and across Whitehall, civil servants - civilian advisers to ministers, civilian officials - and their political masters did not show the moral courage, the intellectual courage, they needed sometimes to challenge advice from the armed forces," he told MPs on the Defence Select Committee.
"At times and in places one saw military advice to ministers that was driven by a military view of the situation which wasn't necessarily the same as what the wider national interest might or might not be."
Outlining the tensions in Whitehall, Sir Sherard said he passed on comments from one US general calling for more British troops, only to be rebuked by a senior Foreign Office official because "it upsets the MoD".
He added that w hen officials and intelligence agents warned of the deteriorating situation on the ground in Helmand province "a senior general came up to me and said 'Sherard, your embassy has lost the plot'".
Sir Sherard praised Mr Miliband, who "told us to report the truth as we saw it" even if it was unwelcome or awkward.
But he said there was a failure among ministers and officials during the Tony Blair and Gordon Brown years to challenge the plans being put forward by the generals, with the politicians "in awe" of the military.
"All of us feel tremendous loyalty to the armed forces, we saw these brave men and women prepared to lay down their lives for their country.
"And, particularly among civilians with no experience of the military, none of our senior civil servants or politicians - or very few of them - had military experience, there was a feeling that in a war one has always to defer to the military."
He added: "I found that many of the politicians I worked for and admired in a Labour government were in awe of the generals, of the military.
"They hadn't experience of the military before they found themselves sitting on committees directing a great and important war."
He said d eployment of extra troops was "discussed and virtually agreed with the Americans before our own politicians were consulted".
Sir Sherard added: "There were also cases - I don't know whether this was by accident or design - whereby the papers presented to ministers were almost incomprehensible to a civilian without knowledge of military acronyms."
Politicians were also kept in the dark about the number of special forces troops in Afghanistan: "This wasn't reported to ministers in the papers giving the total military contribution, on the grounds of security."
In an example of the lack of political scrutiny of military decisions, Sir Sherard said a minister confessed to being unable to properly challenge the plan to deploy Tornado jets to replace the Harrier force in Afghanistan.
"I did brief a minister to point out this would cost £70 million to build new taxiways at Kandahar and that minister said to me 'Sherard ... I can't question the chief of the defence staff on this because I confess to you I don't know the difference between a Tornado and a torpedo'."
Labour committee member Madeleine Moon asked: " The incoherence, the misinformation, the incomprehensible nature of some of the briefings. Was this a deliberate ploy to get the decisions and outcomes the military wanted?"
Sir Sherard told her: "I think that's a bit harsh. We were all engaged, and I include myself in this, in a massive act of collective self-delusion.
"We all wanted to believe that it was working. We wanted to please ministers, the armed forces, the Americans.
"There is nothing new about this, the same thing happened in the early years of the Vietnam War when the best and the brightest around John F Kennedy knew that the American strategy in South Vietnam couldn't work, wouldn't work, but they used the phrase that we used ourselves in Afghanistan 'progress is being made but challenges remain'.
"So it was wishful thinking rather than some massive conspiracy."
Retired brigadier Ed Butler, who commanded the SAS and led 16 Air Assault Brigade as it moved into Helmand in 2006, told the committee there was a lack of clarity about the British mission.
"There were multiple missions. There were conflicting and competing missions," he said.
"There was no clarity of what our strategic objectives were and there was no real definition of what success or failure might look like.
"There was, at best, a collection of various different objectives, none of which in 2005 or 2006 were ever really clarified or defined to us on the ground."
Asked about Sir Sherard's claim about "self-delusion", Mr Butler said there was "no self-deception" among those involved in planning the deployment at a tactical level.
But he added that there was a lack of understanding about the political situation and the Department for International Development (DfID) had a "utopian" view of what could be achieved.