£7m of VAT revenue brought in from a £45m phone-in scandal should be returned, MPs have demanded.

The demand was made after it emerged that viewers of GMTV, Richard and Judy, and a number of ITV programmes had wasted £45m entering contests that they had no chance of winning. Broadcasters have promised to return the cash if punters make claims.

Unclaimed cash would be given to charity, broadcasters added, but any such donation will not qualify for a VAT refund, swelling the Treasury's coffers.

Adam Price, a Plaid Cymru MP, told The Times: 'It is tantamount to the proceeds of crime. There is no case for the Treasury holding on to the money.'

Nigel Evans,a member of the Commons Culture Media and Sport Select Commitee added: 'The Treasury must not become the only beneficiary of this scandal.'

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