EU's new security database project in crisis
The European Union's plan has already cost more than double its budget.
And the project was so far behind schedule that a crisis was looming, the ministers told the press at the informal talks in Prague.
Experts at the meeting estimated that the second-generation Schengen Information System (SIS II), originally expected to cost 23 million euros (30 million dollars), had already cost between 60 and 80 million euros, diplomats said.
The combination of cost overruns and continuing delays in launching the system led some ministers to question whether there was any point in continuing the project.
"From our point of view, the test phase (of the Schengen Information System II, SIS II) has failed ... The technical experts couldn't manage it," Austrian Interior Minister Maria Fekter said.
"It's obvious that we cannot fulfil the schedule on SIS II, we couldn't start the global testing ... It's one of the most important problems, one of the biggest issues and projects in the field of security," Czech Interior Minister Ivan Langer, who hosted the meeting, said.
The Schengen system is one of the EU's cornerstone projects, abolishing border controls between all the bloc's member states except Britain, Ireland, Romania, Bulgaria and Cyprus.
When the system was created in 1995, Schengen member states exchanged basic information, such as passport numbers, on travellers entering their territory from outside the Schengen zone via the computerized Schengen Information System (SIS).
When the EU expanded to take in 10 new states, mainly in Central and Eastern Europe, in 2004, Schengen members decided to create a new SIS which would both accommodate the new members and allow them to exchange not just passport numbers, but fingerprints and photos.
But the new system, SIS II, which was originally scheduled to begin operations in September 2009, experienced huge technical problems, with computers in the member states unable to communicate with the EU's centralized database.
The problems lasted so long that the EU, losing patience, invited the new member states into the Schengen zone under the old technical system in December 2007 -- re-naming the system SISone4ALL.
Officials now say that there is no chance for SIS II to come online in September, with delays of months or even years on the cards.
Ministers on Thursday insisted that it was still not too late to bring SIS II into effect -- especially since EU newcomers Romania and Bulgaria still hope to join Schengen once the system is in place.
"It's true that there is a bit of a delay but we'll fix a calendar, and we'll stick to it," EU Justice Commissioner Jacques Barrot said.
"I think we need SIS II and we need to make the relevant investments. (The original) SIS cannot function with this enlargement," Italian Interior Minister Roberto Ernesto Maroni added.
But Langer said that the problem had reached "crisis" proportions, and offered to oversee a rescue plan personally.
German Interior Minister Wolfgang Schaeuble said that it would also be possible to use biometric data in the current SIS system.
And Fekter warned that EU member states were running out of patience with the European Commission, the EU executive, which is charged with overseeing the project.
"We have no more confidence in the commission," she said.