Byers faces new claim of 'cronyism' over former special adviser

Stephen Byers is facing a fresh row over the appointment of a former special adviser to a powerful watchdog role.

Lord Norman Warner, who was Jack Straw's senior policy adviser, is tipped to take over as the new chairman of the Audit Commission, prompting claims that the government wants to appoint a "crony" to the role.

Lord Warner, a Labour peer, would be taking over from Dame Helena Shovelton. Dame Helena ruffled Government feathers after publishing two critical reports on the Government's record on the NHS. Ministers decided not to renew her contract.

Dame Helena hit out at the Government after she left and said that it was "crucial" that her successor was "equally committed" to its independence. She said the Government had undermined her role and accused Nick Raynsford, the Local Government Minister, of declining to give his reasons for not renewing her contract.

Mr Byers' department is understood to be in the final stages of consulting on the appointment to the new post. It comes at a crucial time for the Government, which is pushing through reforms of the NHS. The Audit Commission, which is part of the Department of Transport, Local Government and the Regions, will monitor billions of pounds spent by the NHS, local government and public-private partnerships.

Norman Baker, the Liberal Democrat's spokesman on freedom of information, warned last night that the Government should appoint a completely independent figure to avoid fresh allegations of cronyism.

"It is important that anyone appointed to such a post is not only independent but seen to be independent," he said. "Given the government's obsession with the control of information, such an appointment is bound to lead people to conclude that Tony Blair is seeking to shut down yet another avenue of scrutiny and accountability."

Lord Warner, a former social services director, was Mr Straw's special adviser from 1997 to 1998, while Mr Straw was the Home Secretary. In 1998, Lord Warner was appointed the chairman of the youth justice board and was also made a Labour peer.