Without further work, it "would be inappropriate to proceed" to Stage 2, the committee says.
The committee recognises it is "a potentially powerful tool" that could cause the Scottish public to "reconsider their resource use decisions". But says that in its current form it cannot be justified.
More work needs to be done into the administration of the levy to make it more centralised and cost-effective, and more research needs to be done into its potential economic impact.
More surprisingly, the committee also says that a recent study into the environmental impacts of the levy by AEA Technology (ENDS Report 368, p 29 ) "ought to be comprehensively revisited" due to "fundamental" concerns about its conclusions.
The assumptions made by AEA into the likely impact of a rise in paper bag use draw particular consternation.
The committee also calls upon Ross Finnie, the environment minister, to report on how the forthcoming housewaste prevention strategy - due in "early 2006" - will deal with plastic bag use in an integrated way.
It wishes to see "ambitious measures to address plastic bag use" in the strategy, "including exploration of the option of a levy".