LABOUR demanded yesterday that the government’s spending watchdog investigate the shadowy tax deal struck with Google.

Shadow Treasury secretary Seema Malhotra called for the National Audit Office (NAO) to shed light on the process which saw Google agree to a £130 million payment to the Treasury last week.

The deal will see the transnational tech company pay a corporation tax rate of just 3 per cent following profits of £6 billion in Britain over the past decade.

Ms Malhotra said many that MPs were concerned that HM Revenue and Customs had taxed Google on only a fraction of their activities in Britain.

“This process has taken over six years and the outcome appears to have resulted in an agreement to pay a very low effective tax rate,” she wrote.

“This has caused understandable concerns about the impact on our public finances.”

Labour has also called for scrutiny of whether cuts to HMRC had reduced “its ability to negotiate fair tax settlements with multinational corporations such as Google.”

Ms Malhotra’s intervention came after PM David Cameron faced the fury of MPs in Parliament.

Labour leader Jeremy Corbyn said the debacle showed there was “one rule for big multinational companies and another for ordinary small businesses and self-employed workers.”

And Labour MP Caroline Flint said the government should force companies to publish their tax returns.

A spokesman for Mr Cameron has suggested that the PM would be willing to publish his personal tax return in a bid to regain trust.