The UK's Financial Reporting Council is calling for extra powers to bring action against the accountancy firms it oversees — and has asked for new legislation to enable it to do so if necessary.

The watchdog has come under fire this year for being too lenient on the institutions it governs. The criticisms came after it dropped investigations into PwC over its role in the Tesco accounting scandal — the UK supermarket chain overstated its 2014 first-half profits by £208m — and cleared KPMG of misconduct in relation to its audit of UK lender HBOS, which was rescued by Lloyds TSB in 2008.