The PAC says the government is left in an 'invidious position'

Almost half of the £70m compensation that supplier EDS is to pay HM Revenue and Customs (HMRC) following problems with its tax credits software is dependent on the company winning further government business.

Public Accounts Committee chairman Edward Leigh said the government had been left in an invidious position by the agreement finalised last year, which stipulated that £26.5m of the settlement will not be paid to HMRC unless EDS secures future work with Whitehall.