She said the draft report, leaked in yesterday's Independent, was "a devastating indictment of the centrepiece of the Tories' NHS market reforms".
But Rhidian Morris, chairman of the association of GP fundholders, defended the system, saying the findings on the effectiveness of the scheme were dated and that the report contains praise as well criticism of fundholders' performance.
The report, to be published next week, finds that giving some GPs the power to buy their own hospital services has delivered few benefits to patients and failed to provide value for money. It says "few GPs have the skills or motivation to manage large practices fully and competently" and warns that much of the money saved by fundholders has been wasted rather than being ploughed back into patient care.
Dr Morris said most of the data in the report was 18 months old. Figures from the association's own survey showed more than 80 per cent of fundholders were reshaping services, cutting waiting times and reporting much-improved relations with health authorities and improved services for patients. "Fundholding is an enormous success story," he said.
Many of the commission's recommendations were welcome, including the need for improved management and training. "We think it is a fair report," he added, accusing critics of quoting selectively. "What it essentially shows is that some health authorities, trusts and fundholders are performing better than others."
The Government introduced the scheme five years ago amid much controversy, prompting criticism from Labour that it had created a two-tier National Health Service which allowed the patients of fundholders to jump the queue for hospital surgery, ahead of the patients of other GPs.
The findings of the 18-month inquiry were backed yesterday by Mary Selvadurai, a GP in Stevenage, who left the fundholding scheme a year ago after being a member of a large fundholding practice for a year.
"People were throwing in computers and buying things they don't need," she said. She had gone into the scheme only to ensure that her patients were not disadvantaged, but had been disgusted by the waste.
"I was asked to change my computer system at a cost of pounds 40,000, when an upgrade would cost pounds 3,000," she said. "I was told that the money was there, and if I didn't spend it somebody else would have it."
The Audit Commission draft says: "Our conclusion from this study is that the NHS has barely taken the first steps on a huge journey of change. Fundholders' achievements have mostly been low-level (though none the less important) and too few have achieved as much as might be expected."
Labour sources said they feared political pressure would be brought to bear before the report is published next week. A phrase describing GP-dominated purchasing of NHS care as "not desirable" has been removed already.