Executives from Google and its auditors Ernst & Young are to be recalled to face the Public Accounts Committee (PAC), following claims there were inconsistencies in earlier evidence about how the technology company operates in the UK and the tax liabilities that arise.

PAC chair Margaret Hodge has said she will ask Google to explain its earlier comments to the committee, which suggested it does not make sales to the UK from the UK but from Dublin, so limiting its liability for corporation tax and other charges.

Google said at the time that the staff at its European headquarters in Dublin were responsible for selling advertising to clients, while those based in the UK were not involved in selling but in helping people make the most of the web.

However, a recent investigation by Reuters, which included interviews with more than a dozen customers and former staff, and an examination of job advertisements, CVs and endorsements on networking website LinkedIn, claims to show many UK-based jobs that go further than marketing, to actually target, negotiate and close sales of Google's advertising products.

Google has called the Reuters story 'wilfully misleading' and said they complied 'with all the tax rules in the UK and in every other country in which we operate'. A spokesman said the company denied misleading the PAC and that it stood by the statement that no selling was being conducted in the UK.

In her comments, Hodge also suggested that E&Y had 'questions to answer about whether they were being wholly open with us as a committee'. In an earlier PAC review of the work of the Big Four, John Dixon, E&Y's head of tax policy, was asked if his staff walked around the offices of its clients to check they were conducting the activities in their UK offices that they described in statutory accounts and in statements to the tax authority, and he said that they did.

Hodge said that the Reuters report suggested that E&Y had not been as diligent as these comments suggests.

E&Y declined to comment on Google, citing client confidentiality, but a spokesman said 'Ernst & Young conducts audits in accordance with International Standards on Auditing,' and that this included the standard that 'requires us to obtain an understanding of the entity and the environment in which the entity operates'.