One of the problems with the Merlin is that it was a compromised design from the start & beset by the political imperative to have a 50:50 split in workshare on a MANHOURS basis between Italy & the UK. Thus, when the design work was done there was almost as much need to place the work with the appropriate country to even out the manhours as there was to deliver the best capability, hence the reason why Agusta got the MRGB when they had never designed one before whereas Westlands had. Every design change also had to be considered in the light of the manhours workshare, too. Barking but true.
The MRGB that was delivered was unable to handle all the power that the RTM 322 could deliver & they had to be down rated as a result. Also, the RTM322 Specific Fuel Consumption was not as good as forecast meaning that more fuel was required for a given range. So, a heavier aircraft with less power than expected = lower pay loads.
We also have to remember that the a/c was originally designed as an ASW aircraft & the original (RN) staff requirement called for an aircraft with 4 hours time on station, with the sonics capabilty of the Sea King (or better) & the agility of a Lynx so that it could operate from Type 23s in a sea state 6. 3 engines were deemed necessary to give the power & redundancy for small deck operations, particularly as UK indistry did not have an engine on the books that could do the same job with 2 (RR were VERY keen on the Merlin using 3 x RTM 322s!!!)
Because of the afforementioned power/ gearbox/ fuel consumption problems the Mk1 could never achieve the 4 hours time on station in a sea state 6 and was due to be upgraded to Mk2 standard with a new MRGB able to handle the power at a later stage. This Mk2 upgrade never happened due to whichever defence cuts were necessary at the time.
The procurement of the Merlin is a book in its own right and there are lots of other examples of cock ups that I know of (mainly conmcerning the ASW variant) but we are where we are!