According to UK newspaper The Telegraph, taxpayers will be footing the bill for the lawsuit the supplier brought against the Department of Health (DoH) when it cancelled its £896m NPfIT contract unexpectedly in 2008.
It is believed that total damages payable is still being worked out in court and it is unclear whether the government will be expected to pay the total £700m.
Fujitsu won a contract to digitise patient records in the South of England in 2002, but the deal was cut short after disagreements surrounding a new system for electronically displaying and storing X-rays arose.
Following the termination, the tech giant announced its intention to sue the Department of Health (DoH) for £700m – an amount it would have received for completing the entire project.
In September last year, the Parliamentary Public Accounts Committee (PAC) investigated the government's bill for the legal row, placing the total cost at that time at £31.5m.
Although Committee member Richard Bacon predicted costs would not reach £700m because Fujitsu only completed a small part of the project, he said that ultimately, the government would not be able to hide the total bill.
The NPfIT intended to bring modern technology to the NHS, such as new computer systems and services that would link GPs to hospitals and other community services.
However, the project has encountered many problems along the way, including a National Audit Office (NAO) report that predicts the Health Service has written off £2.7bn of IT assets that were part of the project.
Last week, a similar example of poor government IT procurement emerged where the NAO claimed that the Home Office wasted £347m on a failed IT project.