The UK government handed a contract to feed more than a million pupils eligible for free school meals to a company which has been accused of “woeful” preparation that left children going hungry and parents humiliated.

The task, outsourced to French-owned Edenred under emergency powers without a competitive tendering process, involves distributing food vouchers valued at up to £234m, according to fresh disclosures.

The contract runs for up to three months, indicating that the Department for Education expected the firm – which has fewer than 150 staff – to distribute the £15-a-week vouchers to the 1.3 million children in England eligible for free school meals.

Despite the fact that the vast scale of the challenge was indicated at the outset by the value of the contract, the scheme has been dogged by problems since it started in March.

Parents of children who would usually receive free school meals, but are at home during the lockdown, are meant to be able to use vouchers provided by Edenred to buy food in shops.

But the firm’s website was initially overwhelmed, leaving desperate parents unable to log on and provoking fury among headteachers, who urged the government to intervene.

An investigation by Schools Week last month found that some parents phoned schools in tears after being made to wait two weeks for vouchers.

The site was upgraded over Easter but a report by the BBC this week found that parents were arriving at the tills only to be left “humiliated” when supermarkets wouldn’t accept their vouchers.

Edenred said 3.87m vouchers had been issued to 16,500 schools and that the scheme was now largely working well, with instances of vouchers not being accepted likely to be down to “human error”.

But multiple Twitter users are still complaining of being unable to access the vouchers, although the company said it does not resolve customer issues via Twitter.

Companies House accounts show that Edenred’s UK business has just 145 employees and revenues of £11.8m.

But Edenred said it rejected the notion that the business was too small to manage a £234m contract, adding that it had been the UK’s largest provider of childcare vouchers.

It said that its much larger French parent company, which reported revenues of £1.4bn last year from managing employee benefit schemes such as luncheon vouchers, is supporting its UK subsidiary.

Andy Jolley, a former school governor and free school meals campaigner, said the problem was not Edenred’s size but its “woeful” preparations for the contract.

“Despite the protestations about being overwhelmed, it’s clear that DfE and Edenred knew the scale of the issues prior to agreeing a contract,” he said.

“That ministers sat back and watched as schools struggled and children went hungry is unforgivable. There are serious questions as to why the plug wasn’t pulled after four weeks of abject failure and how much profit will be made on the back of this catastrophe.”

Edenred declined to comment on the commercial terms of the contract, which did not go through the usual competitive tendering process due to “the emergency situation caused by Covid-19 pandemic”.

Documents accompanying the contract cite “a critical need to enable families the access to the free school meal replacement scheme”.

They add that “standard quality and price criteria are not applicable on this occasion”.

A spokesman for Edenred said: “The free school meal voucher scheme is helping hundreds of thousands of families every week and has put £58m in eGift cards into the hands of people who need them.”

“Edenred rejects entirely that the preparation for the scheme was woeful. We were asked by the DfE to create, launch and deliver a scheme within 10 days, which we did. For the vast majority of parents and schools this has worked well. We accept there were issues after the launch and worked tirelessly to address them.”

He said improvements to the scheme had almost entirely eliminated waiting times and that the system was now working better.

“Where issues remain, we are proactively working with schools to ensure these are resolved,” he said.

The contract was for an initial four weeks with an option to extend up to 12. It launched five weeks ago on 27 March, indicating that the Department of Education appears to have decided not to terminate it after the trial period.

The Department for Education said: “Improvements have been made to Edenred’s technology system and we expect the company to continually improve to meet this unprecedented situation.”