Carillion "wriggled out" of its obligations to pensioners while paying out tens of millions in dividends for shareholders and "handsome pay packets" for bosses, according to the Commons Work and Pensions Committee.
The damning report comes as the accountancy watchdog said it will open an investigation into accountancy giant KPMG over its audit of the collapsed construction giant in a bid to discover whether the auditor breached any requirements, in particular, "ethical and technical standards".
On Monday, the Commons Work and Pensions Committee criticised the collapsed outsourcing giant after publishing a letter from Robin Ellison, chairman of trustees of Carillion's pension scheme.
Carillion's liquidation left in its wake a £900 million debt pile, a £590 million pension deficit reported by the firm, and hundreds of millions of pounds in unfinished public contracts.
Mr Ellison's letter suggests the pension deficit could be even higher at £990 million, the committee said.
Carillion has been "falling short" of what trustees expected it to contribute to pension schemes since 2008, the MPs said after analysing the letter.
The company citied cash flow problems as a reason for not making higher pensions contributions in 2011 and 2013, but paid more than £70 million in dividends in both those years.
The trustees were also "kept in the dark" about the state of Carillion, only having access to information that was "largely" in the public domain until May 2017.
And finally, the trustees "negotiated away" pension deficit contributions in the autumn in an effort to keep Carillion afloat by enabling more borrowing, the MPs said in comments that will ratchet up pressure on Ellison ahead of his appearance before the committee on Tuesday.
In a damning assessment, committee chair Frank Field said: "It's clear that Carillion has been trying to wriggle out of its obligations to its pensioners for the last 10 years.
"The purported cash flow problems did of course not prevent them shelling out dividends and handsome pay packets for those at the top.
"This culminated in negotiating deficit contributions away entirely last autumn to enable more borrowing.
"Remarkably, this was endorsed by the trustees and the Pensions Regulator."
The Labour MP went on: "Once again, TPR has questions to answer. They have been sniffing around Carillion - at the trustees' behest - since at least 2008, though it is not apparent to what effect. When 10 years later the company collapses with £29 million in the bank and £2 billion in pension liabilities it doesn't look good for them."
Also on Monday, it was announced that the Financial Reporting Council (FRC) will open an investigation into the company under the Audit Enforcement Procedure, following inquiries made since Carillion's profit warning in July.
The probe will cover 2014-2017 and will consider KPMG's audit of the company's use and disclosure of the going concern basis of accounting, estimates and recognition of revenue on significant contracts and accounting for pensions will all come under the FRC's microscope.
The FRC has said it will conduct the investigation "as quickly and thoroughly as possible".
A KPMG spokesperson said the company "believed that we conducted our role as Carillion's auditor appropriately and responsibly.
"Transparency and accountability are vital in building public trust in audit.
"We believe it is important that regulators acting in the public interest review the audit work related to high-profile cases such as Carillion.
"We will co-operate fully with the FRC's investigation."
Business Secretary Greg Clark added that he "welcomed the announcement from the Financial Reporting Council that following their initial enquires into the collapse of Carillion they will be opening an investigation into KPMG's audit of the company's financial statements.
"I had written previously to the FRC asking them about this matter and trust their investigation will be conducted as quickly and thoroughly as possible."