They singled out former directors Richard Adam, Richard Howson and Philip Green for particular scrutiny, saying the men had expanded the firm through ill-judged acquisitions while hiding Carillion’s financial problems from shareholders.

“Even as the company very publicly began to unravel, the board was concerned with increasing and protecting generous executive bonuses,” the MPs added.

“Long term obligations, such as adequately funding Carillion’s pension schemes, were treated with contempt.”

They said the directors had presented themselves during parliamentary hearings as “self-pitying victims” of “unforeseeable mishaps”.

But Carillion’s former finance director, Richard Adam, said he rejected the committees’ conclusions and objected to quotes in the MPs report, which he said had been misattributed to him.

Former chairman Philip Green said: “The board always sought to make decisions on the best available information and with the best professional advice; furthermore we always strived to act in the interests of the company and all its stakeholders.”

What are the auditors accused of?

The two select committees also attacked the big four accounting firms for approving Carillion’s accounts despite its spiralling debts.

They said Ernst & Young was paid £10.8m for “six months of failed turnaround advice”, while Deloitte received £10m to be Carillion’s internal auditor, but was either “unable or unwilling” to identify failings in financial controls, or “too readily ignored them”.

They also said KPMG had failed to question Carillion’s financial judgements, while PwC was “continuing to gain” as its official receiver “without adequate scrutiny”.

Ms Reeves said the competition authorities should consider breaking up the big four accountancy firms “to help increase competition and deal with conflicts of interest”.

But a KPMG spokesman said it believed it had conducted its audits of Carillion “appropriately”, and Ernst & Young said it was “extremely disappointed that despite all efforts the business was not rescued”.

Deloitte said it was “disappointed with the conclusions of the committees” while PwC defended its role as official receiver.

“Our priority has been to keep public services running safely across the country while saving thousands of jobs,” said PwC chairman and senior partner Kevin Ellis.

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Carillion delivered “swathes” of public services, MPs said

Michael Izza, chief executive of the Institute of Chartered Accountants, told the Today programme the report felt like a watershed moment for the industry.

“It gives us an opportunity to think again about what we need to do to fix this. Because if we don’t fix this I don’t think we’re going to have a profession in 20 years time.”

What are regulators and the government accused of?

The MPs also accused regulators of being too “passive” in tackling Carillion’s problems, adding that the government had “nurtured” an environment in which the collapse of an outsourcing firm was “a distinct possibility”.

“When swathes of public services are affected, close monitoring of exposure to risks would seem essential,” the report said.

“Yet we have a semi-professional part-time system that does not provide the necessary degree of insight for government to manage risks.”

Frank Field, chair of the Work and Pensions Committee, said: “Government urgently needs to come to Parliament with radical reforms to our creaking system of corporate accountability.

“British industry is too important to be left in the hands of the likes of the shysters at the top of Carillion.”

A Cabinet Office spokeswoman said: “We have recently announced a number of measures to support government suppliers – strengthening our commitment to prompt payment; protecting staff, businesses and small suppliers from irresponsible directors.

“We welcome the report from the joint select committee and will respond fully in due course.”