Frank Dobson, the former health secretary, claimed yesterday that the Blair Government was aiming to redefine the NHS as "a health insurance system not a health care system", and that plans for foundation hospitals "will mean the end of the NHS".
His remarks at the TUC's annual conference came as opposition peers expressed grave concerns about the creation of foundation hospitals, calling the Government's scheme "half-baked".
The attacks follow a similar rebellion on the issue in the House of Commons, when the Government's majority was reduced to 35.
Lord Clement-Jones, the Liberal Democrat health spokesman in the House of Lords, warned Lord Warner, a Health minister, that he will face stiff opposition from MPs in his own party during the annual Labour conference in Bournemouth in three weeks' time. He added: "On these benches our aim is to force the Government to scrap this half-baked scheme of reform completely. Foundation hospitals were nowhere in the Government's manifesto at the last election and there has been no consultation on these proposals at all."
The Tory spokesman in the Lords, Earl Howe, said the culture of "dog eat dog", which will be encouraged by foundation hospitals, had no place in the NHS.
"The Government profess to believe in levelling up standards of NHS care. I frankly cannot see how this is possible when the very trusts who need capital most would be deprived of it, while foundation trusts get it because they're considered to have earned it as their privilege," he said. "As night follows day, financial growth in foundation trusts will mean cuts in the budgets of other hospitals to the detriment of patients."
Mr Dobson accused the Government of "trying to remodel the NHS on the lines of the USA", by introducing commercial considerations and urging hospitals "to approach problems with the same attitude of mind as American health care corporations".
But John Reid, the Health Secretary, defended the Government's plans to give some NHS hospitals more control over how they are run.
"This is about giving the working people of this country a better service than ever they have had before. And not only to make it a fair system to all, but to make it as personal as possible to everyone, and to do that you have to decentralise," he said on BBC Radio 4.
"If we do not improve and reform the health service at the time we are putting the capacity in, then we will not get a health service that is supported for the next 50 years as it was for the last 50 years," Mr Reid added.