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Lord Holmes, the Conservative life peer, said it was important theGovernment did not rely too much on one supplier.

"If AWS is reached for as a solution to all, it's not too difficult to see where that road leads...What we're currently seeing is the latest iteration of the biggest player being able to eat the largest piece of pie," said Lord Holmes. "That should be at least of significant interest to the private sector as well as the public sector."

Lord Maude, the former minister for the Cabinet Office, said: "When it comes to hosting, we've regressed into allowing a small group, and one vendor in particular, to dominate.

"If you take a view of the Government as simply as a customer, it makes absolutely no sense for the Government to be overly dependent on one supplier. No one would sensibly do that."

The comments follow an industry roundtable this week, organised by British cloud supplier UK Cloud, into the issues with the current procurement system.

Suggestions at the roundtable included the Government bringing in external advisors to assist onprocurement, ensuring technical expertise. Names such as Stephen Kelly,the former chief operating officer of HM Government, and Dame Margaret Hodge MP also were attending.

Baroness Nicky Morgan, who chaired the event and acts as an advisor to Grayling, a lobby group that is understood to have previously worked with UK Cloud, this week said there remained "alot of work to do across Government to ensure procurement capability is improved".

Others, however, have warned against an "outright protectionism" when awarding contracts.

Robert Colvile, from theCentre for Policy Studies said:The Government already has a strategy in place to ensure that it doesn't depend on one supplier for cloud computing. But that must not shade into outright protectionism, or 'buying British' purely for the sake of it.

"It's clear that the priority - as with all our procurement - should be to get the best quality at the best price.

The Government is preparing for an overhaul of its procurement processes. In December, it published its "Procurement Green Paper", which detailed planned changes to itsprocurement rules, including ways it could increase transparency and provide more opportunities for smaller domestic businesses to bid for government contracts.

A spokesman for the Cabinet Office said: "Amazon Web Services is just one of the Governments thousands of cloud service providers and our procurement decisions are always based on getting value for taxpayers and the best quality services."

Amazon did not respond to requests for comment.

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Tory grandees weigh into row over Amazon cloud contracts with government - Telegraph.co.uk