Digby Jones, the director-general of the Confederation of British Industry, has been accused of promoting personal business interests in his defence of private sector involvement in hospitals, schools and public transport.

Mr Jones has repeatedly attacked the "vested interests" in public services, most recently in a newspaper article last week. He called, too, for a "strengthened" use of private firms in the National Health Service.

But it has emerged that Mr Jones is paid £25,000 a year as a non-executive director of iSOFT, a software company that has attracted significant NHS contracts in the past year.

He also owns £125,000- worth of shares in the company, which were bought in May 2000, and he has connections with the accounting firm KPMG, which first set up iSOFT.

In April 2001, iSOFT won an £850,000 seven-year contract from the Grampian Primary Care NHS Trust as the preferred supplier for modern patient information systems. The following month it signed a similar contract with Harrogate Health Care NHS Trust.

The electronic patient records system – part of a £4m Private Finance Initiative project – went live in September 2001, and a month later the same sort of system came on line at Bolton Hospitals NHS Trust.

This year, Path Links, a government-funded pathology service, awarded a multi-million pound contract to iSOFT for IT help in the Northern Lincolnshire and Goole Hospitals NHS Trust and the United Lincolnshire Trust.

The company's chief executive Patrick Cryne, in a statement accompanying the latest half-year accounts, outlined plans for expansion into the hospitals sector. He said: "The iSOFT Group is especially well placed to benefit from this growth and to continue its strong progress."

Mr Jones has regular access to both the Prime Minister, Tony Blair, and the Chancellor Gordon Brown, in his position as director-general of the CBI – a post for which he is paid £250,000 a year.

The GMB trade union, which has campaigned vigorously against the increased use of private firms in the NHS and other public services, last night accused Mr Jones of "hypocrisy".

The general secretary of the GMB, John Edmonds, said: "Digby Jones's massive income is matched only by his massive hypocrisy.

"How dare he accuse dedicated public service workers of being an obstructive "vested interest" when he himself is directly profiting from the privatisation policies he is seeking to advocate on behalf of the CBI.

"The public wants to see their taxes put into more doctors, more nurses and more treatments, not into profits for Digby Jones and his fat-cat friends."

A spokeswoman for the CBI denied this was a "vested interest", confirming, however, Mr Jones's involvement with the firm, his salary and his shareholdings.

She said: "The director- general of the CBI, is encouraged to take on non-executive directorships."

She said the shareholding was not a large one, and the company itself was one of four or five providing crucial IT support and software to the NHS, to enable hospital trusts to meet a 2003 deadline for getting patient record systems up to date.