The UK has spent £473m on Tamiflu, which is stockpiled by governments globally to prepare for flu pandemics,
The Cochrane Collaboration claimed the drug did not prevent the spread of flu or reduce dangerous complications, and only slightly helped symptoms.
The manufacturers Roche and other experts say the analysis is flawed.
The antiviral drug Tamiflu was stockpiled from 2006 in the UK when some agencies were predicting that a pandemic of bird flu could kill up to 750,000 people in Britain. Similar decisions were made in other countries.
Hidden data
The drug was widely prescribed during the swine flu outbreak in 2009.
Drug companies do not publish all their research data. This report is the result of a colossal fight for the previously hidden data into the effectiveness and side-effects of Tamiflu.
It concluded that the drug reduced the persistence of flu symptoms from seven days to 6.3 days in adults and to 5.8 days in children. But the report's authors said drugs such as paracetamol could have a similar impact.
On claims that the drug prevented complications such as pneumonia developing, Cochrane suggested the trials were so poor there was "no visible effect".
Tamiflu was widely used during the swine flu outbreak
Another justification for stockpiling was to slow the spread of the disease to give time for a vaccine to be developed. The report's authors said "the case for this is simply unproven" and "there is no credible way these drugs could prevent a pandemic".
It also claimed that the drug had a number of side-effects, including nausea, headaches, psychiatric events, kidney problems and hyperglycaemia.
Carl Heneghan, Professor of Evidence-Based Medicine at the University of Oxford and one of the report's authors, told the BBC: "I think the whole £500m has not benefited human health in any way and we may have harmed people.
"The system that exists for producing evidence on drugs is so flawed and open to misuse that the public has been misled."
Dr Tom Jefferson, a clinical epidemiologist and former GP, said: "I wouldn't give it for symptom relief, I'd give paracetamol."
The Cochrane Collaboration researchers have not placed the blame on any individual or organisation, instead saying there had been failings at every step from the manufacturers to the regulators and government.
'Wrong statistics'
However, there is disagreement about the findings and accusations that a simultaneous campaign to open up drug research is influencing the findings.
The pharmaceutical company Roche said "we disagree with the overall conclusions" and warned they could "potentially have serious public health implications".
Its UK medical director, Dr Daniel Thurley, told the BBC News website: "The definitive piece of research stands as the randomised control trials, which were shared with the regulators, which led to them in 100 countries around the world approving Tamiflu for treatment and prevention of flu."
He said the Cochrane group had used the wrong statistics, which "systematically underestimate the benefits" of the drug, and used "unorthodox" methods to analyse the side-effects.
He concluded: "One of the challenges we have here is actually knowing what they've done."
Prof Wendy Barclay, who researches the influenza virus at Imperial College London, said reducing symptoms is children by 29 hours would be "pretty beneficial".
She told the BBC: "Tamiflu works as well as any drug we have now or [that] is on the cards.
"Yes, I think they should replenish the stockpile. What else can you do if a pandemic strikes? We won't have a vaccine for the first six months."
She also questioned the validity of the research as it analysed the impact during seasonal flu: "If it works a little bit in season flu, the chances are they'll work quite a lot better in a pandemic situation and get more people back to school and work."
Kevin McConway, a professor of applied statistics at the Open University, said it was an "impressive" piece of work.
He said: "It is a potential limitation of this study that the work has been carried out alongside campaigning on access to trial data.
"The writers of the review have a clear position in this controversy, and, although I personally do generally agree with their position, I feel it does at times lead to some confusion between reporting the results of the review of these particular drugs and commenting on the general position on access to and use of unpublished data."
The UK Department of Health said Britain was recognised as "one of the best prepared countries in the world for a potential flu pandemic" and "our stockpile of antivirals is a key part of this.
"We regularly review all published data and will consider the Cochrane review closely."
The World Health Organization, which classes Tamiflu as an essential medicine, said: "We welcome a new and rigorous analysis of available data, and look forward to consideration of its findings after it appears."
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