The commons public accounts committee has said BT should be given no more taxpayers' money to roll out rural broadband, until it clarifies how it will spend the £1.bn already paid to it.
Government audits showing how much the telecoms firm charged councils for project management revealed possible savings up to 35%.
So far, BT has won all the UK's rural broadband contracts and the firm said any savings would go on extending coverage.
The telecoms firm said: "Yes, it's true that BT has been able to save the taxpayer some project management costs.
"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."
In response, the Public Accounts Committee said: "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.
"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 completed."
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