The foreign affairs committee accused the then PM David Cameron of lacking a coherent strategy for the air campaign.
It said the intervention had not been “informed by accurate intelligence”, and that it led to the rise of so-called Islamic State in North Africa.
The UK government said it had been an international decision to intervene.
The action had been called for by the Arab League and authorised by the UN Security Council, the Foreign Office added.
An international coalition led by Britain and France launched a campaign of air and missile strikes against Muammar Gaddafi’s forces in March 2011 after the regime threatened to attack the rebel-held city of Benghazi.
But after Gaddafi was toppled, Libya descended into violence, with rival governments and the formation of hundreds of militias, while so-called Islamic State, also known as Isil, has gained a foothold.
Mr Cameron has defended his handling of the situation, telling MPs in January action was needed because Gaddafi “was bearing down on people in Benghazi and threatening to shoot his own people like rats”.
But the foreign affairs committee said the government “failed to identify that the threat to civilians was overstated”, adding that it “selectively took elements of Gaddafi’s rhetoric at face value”.
The government also failed to identify the “militant Islamist extremist element in the rebellion”, the MPs said.
“The possibility that militant extremist groups would attempt to benefit from the rebellion should not have been the preserve of hindsight,” the committee said, adding: “UK strategy was founded on erroneous assumptions and an incomplete understanding of the evidence.”
Crispin Blunt, chairman of the committee, told the BBC: “We were dragged along by a French enthusiasm to intervene, and the mission then moved from protecting people in Benghazi, who arguably were not at the kind of threat that was then being presented…
“Indeed, on the basis of the evidence we took, the threat to the people of Benghazi was grossly overstated.”
The committee said “political options” were available once Benghazi had been secured – including through ex-PM Tony Blair’s contacts with Gaddafi – but the UK government “focused exclusively on military intervention”.
By the summer of 2011, the limited intervention to protect civilians had drifted into an opportunist policy of regime change, the committee said.
“That policy was not underpinned by a strategy to support and shape post-Gaddafi Libya.
“The result was political and economic collapse, inter-militia and inter-tribal warfare, humanitarian and migrant crises, widespread human rights violations, the spread of Gaddafi regime weapons across the region and the growth of Isil in North Africa.
“Through his decision-making in the National Security Council, former prime minister David Cameron was ultimately responsible for the failure to develop a coherent Libya strategy.”
The MPs said Libya had been the “first test ” for the NSC, which was set up in 2010 to coordinate responses to security threats and integrate the work of various relevant government departments.
The committee said there should now be an independent review of the operation of the NSC, which is chaired by the prime minister, to see if it had succeeded in addressing the weaknesses in government decision-making identified in the run-up to the 2003 invasion of Iraq.
The Foreign Office defended the intervention.
“Muammar Gaddafi was unpredictable and he had the means and motivation to carry out his threats,” a spokesman said.
“His actions could not be ignored and required decisive and collective international action. Throughout the campaign we stayed within the United Nations mandate to protect civilians.
“After four decades of Gaddafi misrule, Libya undoubtedly faces huge challenges. The UK will continue to play a leading role within the international community to support the internationally recognised Libyan Government of National Accord.” Source: bbc.com
