LABOUR in power would end the “PFI rip-off,” Jeremy Corbyn has insisted, after a spending watchdog suggested taxpayers faced a bill to private contractors of almost £200 billion for schemes under the controversial Private Finance Initiative.

The Labour leader took to Twitter to declare: “We will bring services back under public control to end the waste of taxpayers’ money and insist that services are run for public good, not private profit.”

Last year at the Labour conference, John McDonnell, the Shadow Secretary, pledged from the platform that if in power the party would not only end the PFI scheme but “bring in-house” current contracts. However, later Labour HQ said it would “review all PFI contracts and, if necessary, take over outstanding contracts and bring them back in-house”.

READ MORE: Theresa May facing prospect of House of Lords blocking Brexit Bill if Holyrood fails to give consent

At the time, the Conservatives denounced the Labour plan as "unaffordable" while the Institute for Fiscal Studies, the respected independent think-tank, said taking back the contracts would cost "an awful lot" in upfront payments.

It is thought terminating PFI deals could involve billions of extra fees as most contracts do not include break clauses.

The National Audit Office found 716 deals are currently operational under PFI and its successor PF2, with annual charges amounting to £10.3bn in 2016/17 and due to stretch into the 2040s.

The report was compiled before the collapse of contractor Carillion. But its release came as the construction giant's failure sparked furious debate about the future of a system which the Labour branded a "costly racket".

The NAO drew no conclusions on the merits of the PFI and PF2 systems, under which private consortiums raise funding to build public facilities like schools, hospitals and roads, in return for regular payments over as many as 30 years.

But it found that the private finance route "results in additional costs compared to publicly financed procurement".

READ MORE: Scottish Parliament sexual harassment helpline takes nine calls

The Government's National Infrastructure Plan suggested in 2010 that capital raised through PFI cost 2% to 3.75% more than from state borrowing, the NAO said.

And it added: "Small changes to the cost of capital can have a significant impact on costs.

"Paying off a debt of £100 million over 30 years with interest of 2% costs £34 million in interest. At 4% this more than doubles to £73 million."

The report said there had not yet been a "robust evaluation" of whether this was offset, as PFI supporters claim, by benefits such as reduced risk to the taxpayer and higher-quality facilities.

Meg Hillier, who chairs the influential Commons Public Accounts Committee, said, 25 years after it was launched under John Major, there was "little evidence" that PFI was delivering value for money.

"Many local bodies are now shackled to inflexible PFI contracts that are exorbitantly expensive to change," the Labour MP said.

"I am concerned that Treasury has relaunched PFI under new branding, without doing anything about most of its underlying problems.

"We need more investment in our schools and hospitals but if we get the contracts wrong, taxpayers pay the price."

Peter Dowd, the Shadow Chief Secretary to the Treasury, said: “Today’s report only further demonstrates this Tory government’s continued commitment to fleecing tax-payers for the benefit of large PFI firms. It also raises more questions over the use of PFI in a week in which the Carillion scandal has left many fearing for their jobs and standard of their public services.”

He added: “The next Labour Government will draw a line under the failed PFI approach to public investment and will replace it by a transparent and accountable approach, which will reduce the costs and deliver significant savings to the taxpayer.”

Rehana Azam, the National Secretary of the GMB union, said the report showed PFI to be "a catastrophic waste of taxpayers' money".

She declared: "Nothing can hide the chronic failure that it has proven to be over decades.

"Carillion is just the latest example of how bad things go wrong when public services are left in the hand of profit-hungry companies.

"This report should mean that the game is up for PFI," added Ms Azam.

READ MORE: Theresa May facing prospect of House of Lords blocking Brexit Bill if Holyrood fails to give consent

A Government spokesman said: "Many vital infrastructure projects like roads, schools and hospitals are paid for by PFI and PF2, stimulating our economy, creating jobs and delivering better public services.

"We have reformed how we manage PFI contracts, and through PF2 have created a model which improves transparency and offers better value for money.

"Taxpayer money is protected through PFI and PF2 as the risks of construction and long-term maintenance of a project are transferred to the private sector," he added.