NHS chiefs defended the recruitment of a £97,000-a-year “head of brand”, saying it was vital to ensure the health service ethos was not diluted by increased private sector involvement.
Chief executive Sir David Nicholson denied it was a "frivolous" waste of money at a time of cuts and a staff pay freeze and blamed the "rather unfortunate" job title for the controversy.
Labour MP Barbara Keeley told him it was the sort of thing that made the public "see red" as he faced questions from the Commons health select committee on efforts to make massive savings.
The NHS has been ordered to find £20 billion of efficiency savings by 2015 amid fears it will lead to widespread staff cuts and affect frontline services.
More than 30,000 NHS jobs are at risk, the Royal College of Nursing (RCN) warned today.
An advert for a Leeds-based "Head of NHS Brand" post - with a salary range of £77,079 to £97,478 - was placed by the NHS Commissioning Board and has been filled from within the health service.
Sir David said the position was needed to make sure private providers "understand what it means to be part of the NHS...the culture and the values and treat their patients accordingly".
"It's really important to us and for patients to know that these organisations are signed up to these values and principles" when they use the NHS logo, he told the committee.
The spending should be seen in the context of significant reductions across the NHS of those types of function more generally, he said.
"The idea that we are frivolously spending more money on things than we did in the past is not right."
Health chiefs also faced a grilling over why the NHS has handed back around £3 billion to the Treasury over the past two years despite the massive cost pressures on the service.
Sir David said that the bulk of the underspend was on national capital schemes including IT and would probably have been wasted if it had been redirected to alternatives.
"My experience is that putting money in the system at short notice on a one-off basis invariably ends in the poor utilisation of that resource."
Asked if he would rather have kept the money within the service than being forced to hand it back to the Treasury, he added: "Clearly I would prefer to have more money to spend on the NHS."
Of £5.8 billion efficiencies identified in the first year of the programme, around £850 million was down to a two-year pay freeze and another £650 million to other pay-related changes, he said.
However around 90% of the savings were ongoing into future years, the MPs were told by NHS director general of finance, performance and operations Sir David Flory.
Sir David denied that NHS bodies were "rushing" into changing the terms and conditions of staff without consulting with trade unions.
But he said flexibilities were "there to be exploited" and that it was right that they should seek to "more creatively manage their pay bills".