Senior Tory officials have admitted the NHS reforms were a "huge strategic error" which David Cameron couldn't even understand when they were proposed.
Both the Prime Minister and Chancellor George Osborne did not fully comprehend the extent of the plans by former Health Secretary Andrew Lansley, according to the Times.
One unnamed insider described the proposals drawn up by Lansley as "unintelligible gobbledegook".
A former No 10 adviser added: "No one apart from Lansley had a clue what he was really embarking on, certainly not the prime minister. He kept saying his grand plans had the backing of the medical establishment and we trusted him. In retrospect it was a mistake."
One senior cabinet minister added the reforms were the biggest mistake the current government has made.
"We've made three mistakes that I regret, the first being restructuring the NHS. The rest are minor," the minister added.
An ally of the chancellor said also says Osborne "kicks himself" for not stopping the reforms, which are estimated to have cost £3bn.
"He had the opportunity then and he didn't take it," the ally added.
The 2012 Health and Social Care Act saw a major overhaul to how the NHS is funded, with many criticising the plans as a way to privatise the service.
Others said the reorganisation of the NHS was an unwanted distraction for those dealing with an estimated £20bn funding gap caused by rising demand.
The reports of disillusion over the reforms from the Tories arrived as more than 400,000 NHS workers stage a four-hour strike over the government's refusal to give staff a 1% pay-rise over fears it would cost too much.
Health officials said the admission from the senior Conservatives that the reforms may have been a mistake has come too late for many.
Mark Porter, chairman of the British Medical Association's governing council, said: "Rather than listening to the concerns of patients, the public and frontline staff who vigorously opposed the top-down reorganisation, politicians shamefully chose to stick their head in the sand and plough on regardless.
"The damage done to the NHS has been profound and intense, so this road to Damascus moment is too little too late and will be of no comfort to patients whose care has suffered."
Jeremy Hunt, the current health secretary, defended Lansley's proposals: He added: "Andrew's structural changes are saving the NHS more than £1 billion a year. Because of that we can employ 7,000 more doctors and 3,500 more nurses.
"We wouldn't be delivering nearly a million more operations a year or be able to put more resources on the front line without what he did. The difficult question for those who complain about Andrew's reforms is where would we have found the money otherwise?"