Hot on the heels of a Budget designed to pump investment into the National Health Service, the government's plans to spur private investment in public services could be facing new trials.

An influential committee of members of Parliament is set to investigate whether the way the government accounts for its private finance initiatives (PFI) and public private partnerships (PPP) is misleading, newspapers say.

That could stir up trouble for the government's hotly-contested plan to part privatise the London Underground - not to mention its controversial wish to encourage more private sector involvement in the NHS.

Off the books

According to the Sunday newspaper The Business, the Treasury Select Committee is to look at the rules under which the government judges whether private finance initiative projects are cost effective or not.

At the moment, the calculations are done under guidance drawn up by the Accounting Standards Board (ASB) in 1998.

But critics told the newspaper that the rules effectively allow the government to keep debt off its own balance sheet.

The Treasury's argument is that since it shares responsibility for projects with the private sector, it should not have to show how much risk a project faces of incurring extra debt.

"I think in the current, post-Enron climate, people have got to be a lot more careful about how they are accounting for their debt obligations," Mike Warburton, senior tax partner at accountants Grant Thornton, told The Business.

"There is nothing illegal about what the government is doing by putting PPPs and PFIs off balance sheet, but a company would no longer be allowed to get away with it."

Troubles come in threes

The government is already facing condemnation from the powerful National Audit Office, which says Transport Secretary Stephen Byers has broke the rules by promising the private firms chosen to run the London Underground a bailout should they run into financial difficulties.

And Bob Kiley, the London transport commissioner who with the mayor, Ken Livingstone, and - if polls are to be believed - a huge majority of Londoners, oppose the PPP plans, is set to throw another spanner in the works.

According to the Observer, Mr Kiley's lawyers are investigating whether the government broke European Union law in the bidding process.

Between them, PriceWaterhouseCoopers, the accountants used to judge how financially strong the bidders were, and Ernst & Young, whose job was to judge value for money, audit five of the eight companies in the three consortia chosen.