Frank Field MP, Chair of the Work and Pensions Committee, said that Grant Thornton’s decision to give up the battle to break the grip of the four major players in the sector on audit work highlighted the need to restore competition in failing market.

Last week Britain’s fifth largest accounting firm said it could no longer compete against the stranglehold of Deloitte, Ernst&Young, KPMG and PwC, and would not pitch for public company business after coming second too many times.

Field said: “That the next biggest contender in the audit market has decided to bow out of the ring surely adds to a central question emerging from our inquiry into the collapse of Carillion.

If Number 5 has given up trying to compete with the Big 4, what hope for the rest? It looks ever more like Government will have to act to restore competition in a market that is failing.”