Lord Warner, the health minister, has said that the private sector will help to "create stronger and more effective Primary Care Trusts", although the Government has denied claims it is set to hand control of the National Health Service's £65bn primary care budget to the private sector.

Yesterday, a "contract notice" in the Official Journal of European Union, placed by the Department of Health, invited private health insurers to bid for roles running and controlling areas of PCTs.

Reports last night suggested that the notice had appeared prematurely in the journal, and was intended to be released next month after ministers had announced the policy. The advertisement said the NHS was making a "step change from a service provider to a commissioning-led organisation".

Companies were invited to begin "a competitive dialogue" to show how patients would benefit from them taking over the responsibility for buying healthcare from NHS hospitals. Private firms would decide which treatments and services would be given to patients on the NHS.

At present, this commissioning work is handled by the NHS managers employed by PCTs. PCTs fund GP surgeries, commission hospital operations and have an influence over which drugs patients are prescribed in each local area.

The notice prompted fears of privatisation by stealth. Frank Dobson, the former health secretary, told The Guardian: "If this not privatisation of the health service, I don't know what is. It is about putting multinational companies in the driving seat of the NHS."

But Lord Warner said that the notice gave the false impression that clinical services may be included under this process. "The Government has no plans to privatise the NHS," he said last night.

"We are determined to create stronger and more effective PCTs, which can secure the best possible healthcare for patients in local areas by commissioning services from a range of providers. We want those PCTs who require it to have access to expert help in developing that commissioning role, including from the private and voluntary sectors if necessary."

The notice was quickly withdrawn, after Unison, the biggest trade union in Britain, called on the TUC to convene an emergency meeting in response to the "breach of trust" from the Government.

But Lord Warner said the intention of involving private companies in the NHS was to "develop a national framework contract which PCTs could use to get this [commissioning] help, quickly and cheaply, without having to go through expensive and time-consuming local tenders. However, owing to a drafting error, the official procurement notice in the OJEU gave the false impression that clinical services might be included under this process. That was never intended."

He said that a revised notice would be issued shortly and reiterated that the Government had made it clear last autumn that there was "no requirement on PCTs to divest themselves of service provision". That remains the case, he said. "The department has therefore withdrawn the procurement notice with immediate effect."