Members of Parliament on the Common's Public Accounts Committee (PAC) have called for government funding to be suspended for BTs superfast broadband expansion due to a lack of transparency.
The UK government has already awarded £1.2 billion to the telecoms company in order to push access to superfast broadband out to rural areas, however audits have revealed that BT could be overcharging councils by up to 35 per cent.
BT claims that the savings were made due to being awarded multiple contracts by the government, and that the money would be used to extend coverage.
"Yes, it's true that BT has been able to save the taxpayer some project management costs," a spokesperson for BT told the BBC.
"Under the original competitive process we were required to bid for each contract individually, with the assumption that we wouldn't win any others.
"That hasn't proven to be the case however and so we are more than happy to pass on the savings we can achieve through economies of scale."
The next round of broadband funding – worth £250 million - has already been rolled out to local councils, however MPs on the PAC has argued that BT should not be able to bid for it in light of the audit's findings.
"It appears with this £250m that local bodies can simply decide to extend contracts with BT where they are in place. This is just not good enough," a PAC spokeswoman said.
"We want to see clearly what the economies-of-scale savings for the first tranche of £1.2bn will be before contracts are extended or competed."