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An influential group of MPs is to investigate claims the country's banking sector is overcharging consumers.

The Treasury committee plans to probe competition in the industry as well as the perceived end of 'free' banking.

Last year First Direct became the first bank to announced fees for its current accounts.

There have been suggestions that banks are looking to new ways to charge customers to compensate for a crackdown on overdraft and late payment fees, with the Office of Fair Trading currently investigating.

The MPs' investigation, which is expected to call for written evidence in the coming weeks, comes seven years after Don Cruickshank published his review into competition in the banking sector.

Last month Britain's eight largest banks announced collective profits for 2006 of some £40 billion.

In separate news, the committee also aims to probe private equity funds following the Financial Services Authority's recent paper on risk and regulatory engagement.

Welcoming the announcement, the GMB union said it hoped MPs would make a "positive contribution to the accountability and scrutiny of this industry".

"GMB is calling on MPs to investigate the practises in the private equity business and to look carefully at the tax regimes involved. GMB, if asked, will submit detailed evidence that should cause MPs to take a very close look at how this industry operates in practice," said the union's general secretary Paul Kenny.