The call has been prompted by a complaint that BT retains an “unacceptable” 70 per cent of fixed-line connections and a warning that the market as a whole is confusing for consumers.

Edward Leigh, chairman of the committee, said: “Many consumers are not getting as good a deal as they could on their telephone bills.”

Mr Leigh went on to link consumer confusion to BT’s high market share. “It is unacceptable that BT retains about 70 per cent of the total market 20 years after privatisation,” he said.

However, it was not clear that Ofcom would heed the MPs’ call, contained in a report to be published today. Its initial response is to sidestep the recommendation, although, unsettlingly for BT, the regulator promised to return to the matter as part of a continuing market review.

In a statement that coincided with the report’s publication, the telecoms regulator said that it “shares the committee’s belief in the importance of providing accurate, up-to-date information to consumers”.

The MPs were also quick to criticise Ofcom’s predecessor Oftel for being “remote from consumers”. In particular, the old regulator was attacked for not following the practice of Ofgem, the gas and electricity regulator, in “encouraging consumers to switch supplier in search of a better deal”.

Mr Leigh, the Conservative MP for Gainsborough, was more blunt in his criticism. He said that Oftel — which ceased to operate last December — had simply failed.

The MPs recommend that Ofcom encourages phone companies to develop “more standard and transparent pricing”, including bills that are easier to understand. That would allow consumers to make clearer comparisons between suppliers.

BT was predictably unhappy with the report’s conclusions. A spokesman for the company said that it “does not accept that Ofcom should actively encourage people to switch suppliers. Ofcom’s key role is to ensure that consumers have a wide choice of supplier and that there are no barriers to entry”.

BT also accused the Public Accounts Committee of examining only a small part of the telecoms market. Its inquiry did not include an analysis of the mobile phone market — where BT is barely represented — or broadband.

Rivals, meanwhile, were quick to jump on the report’s conclusions. Centrica, which owns the British Gas and One.Tel brands, said that it would introduce tariffs under the British Gas label directly comparable to BT, which it claimed would save consumers money.

Nevertheless, BT’s strength in the fixed-line market remains a difficulty for regulators, even though most observers would agree that, on the whole, the UK telecoms market is the most competitive in Europe.

There are over 100 telecoms providers in the UK. But, despite a stream of attempts by Oftel to open up the company’s network in the past four years, BT has managed to hold its market share at a little over 70 per cent.

The company’s rivals complain that they have been frustrated by BT’s blocking tactics, although many competitors have also been hamstrung by their own financial difficulties as the telecoms boom turned to bust. NTL and Telewest, the cable operators, both flirted with bankruptcy after running up debts that the respective businesses could not afford.

BT shares closed down 2¼p at 180¾p.

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