BT is taking the taxpayer for a £1.2 billion ride over a project to install superfast rural broadband, MPs said.

The public accounts committee accused the telecoms giant of "ripping off the country" and said it had a "quasi-monopoly" over the up-for-tender project.

BT said it was "disturbed and mystified" by the report, released after government and local authorities decided to subsidise private companies to connect unprofitable rural areas to superfast broadband.

Just two service providers - BT and Fujitsu - were named as approved bidders before Fujitsu dropped out, leaving BT in complete control of the nationwide project.

The committee's report said the Department for Culture, Media and Sport had mismanaged the project by failing "to deliver any meaningful competition."

It accused BT of exploiting its monopoly by overcharging the government, billing without reference or access to cost information and being secretive with information that would allow for fair competition.

Committee chairwoman Margaret Hodge said: "The lack of transparency over BT's costs is a serious risk to value for money.

"The consumer is failing to get the benefits of healthy competition and BT will end up owning assets created from £1.2bn of public money.

"We now have a situation where local authorities are contributing over £230 million more to the programme than forecast in the department's business case, while BT is committing over £200m less.

"Overall, BT is supposed to provide at least 90 per cent coverage in rural areas but it is preventing local authorities from publishing proper information on the areas the company will and will not cover."

BT claimed the report was "simply wrong" and said that it has been "transparent from the start and willing to invest when others have not."

It insisted the taxpayer was getting value for money and that the network it builds "will be open to all our rivals."

Communication Workers Union deputy general secretary Andy Kerr said BT was "creating thousands of skilled jobs" and accused the committee of "bashing the one company that is investing its own money into projects that are vital for the general good of the country."

He said the question was: "Why have BT's competitors decided not to risk making investments of their own?"