The UK's big four accountancy firms have come under sustained fire from an influential committee of MPs over their work in minimising the tax paid by multi-national companies.

The heads of tax at KPMG, PwC, Ernst & Young and Deloitte were told by Margaret Hodge, chairman of the Commons Public Accounts Committee, that certain activities to reduce tax liabilities were "shocking".

She added that firms which deliberately advise wealthy companies and individuals on how to cut the tax they pay to the Treasury should be barred from receiving lucrative public contracts worth hundreds of millions of pounds a year.

But the accountancy firm executives rejected claims they were marketing "aggressive" tax avoidance schemes to clients and insisted their work benefited the UK by encouraging companies to locate and recruit here.

The bosses appeared for a grilling lasting almost three hours at the House of Commons in the midst of huge controversy over the low tax bills paid by multinationals such as Amazon, Google and Starbucks.

Prime Minister David Cameron last week warned some forms of tax avoidance have become so aggressive that it is right to raise ethical issues and plans to press for action at the G8 summit in Northern Ireland.

Ms Hodge said PwC reported income of £162 million from public sector contracts, Deloitte £159m, KPMG £94.5m and Ernst & Young £72.6m.

"You all get a not insubstantial amount of money from the taxpayer, and yet your main purpose in your tax businesses is to cut the tax paid to the Treasury for the common good," she said. "Do you think you should be excluded from providing services to the public paid for by the taxpayer?"

l Mark Carney, the next Governor of the Bank of England, is to be grilled by the Commons Treasury Committee on Thursday.