The Palace of Westminster has seen fire and floods, some stonework is badly damaged and much of the infrastructure has not been updated since the 1950s.
Restoring it will be "embarrassing, expensive and difficult", a senior insider said.
No final decisions have been taken, but an option under consideration is moving MPs and peers out for five years.
The basements underneath the historic building are full of asbestos, leaking pipes and miles and miles of outdated wiring and cables.
The annual DIY bill is about £30m.
There is a "working assumption" of the cost of restoration is £3bn.
That's considerably more than other estimates previously released.
Cloister Court, part of the building dating back to the 14th Century, is "sinking and crumbling", according to Adam Watrobski, Parliament's principal architect.
Gargoyles and stone facades have been disfigured by decades of pollution.
Crumbling stonework Stonework is badly disfigured in many areas
The options are :
- Moving MPs and peers out completely for five years, closing the entire Palace of Westminster. This would be expected to encounter significant political opposition
- A "partial decant" - the House of Lords and the House of Commons would move out in turn, so one half of the palace could be restored at a time, which would take considerably longer
- Politicians refuse to move and construction takes place around them. That could take decades and cost even more
They are reluctant to make the cost of the building an issue in the run-up to the general election and are expected to commission more research instead.
There will inevitably be controversy about the costs.
He added: "It represents in many ways the national identity of Britain... it has to be done properly.
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