The construction industry was reeling on Thursday after the competition watchdog accused more than 100 companies of price-fixing and local authorities demanded refunds for overcharging in rigged bids.

The Office of Fair Trading said businesses ranging from listed companies to one-man bands colluded on billions of pounds of private and public sector contracts. This raised the prospect that those involved could be excluded from future tenders.

Executives were digesting a report issued by the OFT after a three-year investigation that it said showed the most rife price-fixing it had seen in any industry. "In terms of sheer numbers, there is nothing that beats this one," said Simon Williams, OFT senior director of cartels and criminal enforcement.

The named listed companies - which have the right to challenge the findings - are Balfour Beatty, Ballast Nedam, Carillion, Connaught, Galliford Try, Henry Boot, Interserve, Kier, Morgan Sindall, Renew and Rok.

The OFT said 77 of the 112 companies had admitted some form of wrongdoing in exchange for reduced penalties. The OFT said 5-10 per cent of the companies were accused of more serious rigging, in which winning bidders paid "compensation" to losers with whom they colluded.

Fines on companies can be up to 10 per cent of their annual turnover, leading lawyers to predict they would run comfortably into the tens of millions.

Sir Simon Milton, chairman of the Local Government Association, said: "There are no excuses for collusion, bid rigging or cover pricing, which leaves the public and councils to pick up the tab."

The National Health Service's counter-fraud service said it would be working with the OFT to determine if NHS hospitals have paid over the odds for work. The Office of Government Commerce, which oversees government procurement, said companies found guilty of grave professional misconduct could be excluded from bids under European Union procurement law.

The construction industry has been particularly alarmed by the OFT's focus on the practice of "cover pricing", under which companies deliberately lose tenders by putting in higher bids than rivals. Industry insiders admit cover pricing is widespread but say it is used legitimately by contractors who do not want the job in question but want to indicate their interest in future tenders.