SOME of the biggest building companies in Hampshire are at the centre of allegations they "rigged bids" that may have seen Government agencies and local authorities overpay billions of pounds for projects.

More than 100 construction firms have been accused of forming cartels with rivals to fix prices for work on schools, hospitals and other projects. The list of companies accused by competition watchdogs includes Crest Nicholson, the construction giant behind Southampton's Woolston Riverside project to build 1,600 homes on the old VT site.

The Woolston project is not part of the investigation.

Balfour Beatty, the UK's biggest construction company, which last month bought major Hampshire builder Dean & Dyball for £45m, is another of the 112 companiesnamed by the Office of Fair Trading (OFT).

Others include Linden Homes owner Galliford Try, Brazier owner Kier Group and number two UK6 builder Carillion.

The three-year investigation is not thought to include any work carried out by firms in Hampshire, with the focus mainly on the East Midlands, Humberside and Yorkshire.

The OFT said more than 40 companies had already admitted price-fixing in the inquiry so far, while another 37 companies out of the 112 have applied for leniency.

The inquiry spans 240 alleged cases where firms have colluded to inflate prices during a tender process, covering both the private and public sector, including building contracts for schools, universities and hospitals.

In a minority of more serious cases under investigation, the OFT alleged some firms agreed to make "compensation payments" to unsuccessful bidders, accompanied by false invoices.

The investigation follows a similar inquiry in the roofing industry by the OFT between 2004 and 2006, covering projects including the Bullring shopping centre in Birmingham.

John Fingleton, OFT chief executive, said: "Cartel activity of the type alleged today harms the economy by distorting competition and keeping prices artificially high.

"This investigation, together with the OFT's previous decisions in the roofing sector, will hopefully send out a strong message to the construction industry about the seriousness with which we view suspected anti-competitive behaviour.

"Businesses have no excuses for not knowing and abiding by the law."