The government’s civil service recruitment freeze is delaying Monitor from recruiting a new chief executive, despite urgent calls for “strong leadership” at the regulator, which is set to be given sweeping new powers.

Monitor is awaiting Department of Health approval to formally start the appointment of a permanent chief, it has said, and may also have to seek approval for the final appointment. David Bennett has been interim chief executive since March.

A spokeswoman for Monitor said: “Informal discussions have begun with recruitment consultancies around the appointment of Monitor’s permanent chief executive. However, in light of the recruitment freeze in place for public sector bodies, we are currently in discussion with the DH on when the formal recruitment process will begin.

“The appointment of the chief executive is made by Monitor’s board… however, given the significant new powers proposed for Monitor the [health secretary] will have an interest and we will consult with him on this process.”

Additionally, under the coalition agreement non-departmental body appointments with salaries greater than the prime minister’s £142,500 must be approved by their department.

A DH spokeswoman said Monitor’s board would “normally” make the appointment itself, although it will have to clear the salary with the Department.

Sources told HSJ that health secretary Andrew Lansley may choose to replace some or all of Monitor’s board as part of its transformation to a system wide economic regulator, which would affect the chief executive appointment.

In March, before the general election, Mr Lansley criticised the previous government’s decision to appoint a permanent chair, Steve Bundred, to Monitor in light of his party’s plan to substantially change its role.

Mr Lansley is understood to have discussed the board’s future with Mr Bundred, the former Audit Commission chief executive.

However the DH spokeswoman declined to comment on the potential for changes in the future.

Monitor non-executive director Stephen Thornton, who is also chief executive of the Health Foundation, said the organisation urgently needed clarity and strong leadership, particularly because of the change in role.

He said: “I want us to sort out the leadership of the organisation, and for the secretary of state to make that a priority. The quicker we are able to get out and appoint somebody to that [chief executive] vacancy the better.”

The regulator faces the immediate challenges of overseeing foundations’ financial performance, and efforts to move to an all-foundation trust system by 2013-14.

NHS East of England strategy director Stephen Dunn, who is overseeing the move to an all-foundation system in the region, said: “Now is the time for Monitor to display strong leadership.”