NAO attacks ministers in row over rural broadband The subsidies were designed to extend high-speed broadband to beyond cities and towns to the one third of the country where BT says the case for a commercially-funded upgrade to its network is too weak because the population is too sparse. Nine suppliers were originally approved to bid for contracts but the NAO said the way the Government structured the process and EU state aid rules meant everyone except BT dropped out. It has prompted fears that BT's dominance of the broadband market will increase, preventing competition from bringing prices down for consumers. The inquiry was launched after The Daily Telegraph gave the NAO leaked documents showing officials were warned that BT's mark up on its rural broadband contracts was up to 80pc. The company denied the claims. According to the NAO, the Government had expected BT to carry 36pc of the cost of each project. However, the Department for Culture, Media and Sport now expects only 23pc of the total cost of the scheme to fall on the supplier, a shortfall of £207m. BT insisted last night it was "delivering excellent value for money." The NAO said it was hard to judge because the company kept officials completely or partly in the dark over 64pc of the cost of delivering each project. "There was strong competition when prices were set at the start of the process and that has ensured counties have benefited from the best possible terms," a BT spokesman said. Deploying fibre broadband is an expensive long-term business and so it was no surprise that others dropped out as the going got tough. The company disputed the NAO's figures and said it was on track to pay for 38pc of the total cost of the scheme. A DCMS spokesman said the report was "confirmation that processes we have put in place to ensure value for money are strong and robust." It said that the structure of the scheme reduced risks to the taxpayer, although the NAO said it was part of why BT was handed a monopoly. "We agree that effective enforcement of the contracts is important and are working with local authorities to ensure this," the DCMS spokesman said. Margaret Hodge, the chairman of the Public Accounts Committee, said consumers would have to rely on Ofcom to ensure BT does not make "super profits" from its dominant position.