Anger as outspoken Whitehall watchdog is sacked by Blair Government

Tony Blair was accused of attempting to "neuter" the independent Whitehall spending watchdog yesterday when opposition MPs denounced the sacking of its independent-minded chairman.

A furious political dispute broke out as Conservatives and Liberal Democrats condemned the decision not to reappoint Dame Helena Shovelton as chairman of the powerful Audit Commission, which scrutinises 13,000 public bodies that spend nearly £100bn a year.

Dame Helena will stand down in November after being informed last week that she would not be reappointed at the end of her three-year term.

The commission, which has been given a hugely expanded role reporting on the NHS and partnerships between local councils and the private sector, has been a thorn in the side of the Government.

Nigel Waterson, the shadow minister for Local Government, said: "Labour are a party of control freaks too arrogant to admit failings and too weak to stomach criticism, even if entirely justified. Dame Helena Shovelton has been critical of the Government, so naturally there is no place for her."

Paul Tyler, for the Liberal Democrats, said: "It would be unfortunate if this is an attempt by government control freaks to neuter one of our most valuable watchdogs."