Mr McLoughlin said the report made "uncomfortable reading" and outlined its findings.
He told the Commons:
It is clear that the inquiry has identified a number of issues which confirm that my decision to cancel the franchise competition was necessary.
These include a lack of transparency in the bidding process, the fact that published guidance was not complied with when bids were being processed, inconsistencies in the treatment of bidders and confirmation of technical flaws in the model used to calculate the amount of risk capital bidders were asked to provide to guard against the risk of default.
The Laidlaw inquiry also mentions factors "that appear to have caused or contributed to the issues raised".
More top news
Did the International Space Station take a wrong turn?
The wife of a British aid worker held by Islamic State militants has recorded a message to his captors appealing for his life to be spared.
Even if you're having a tough day in the office, it's unlikely to be as difficult as the one facing the director of the US Secret Service.