Twenty hospitals need to be merged or taken over to improve the quality of care for patients, the head of the King’s Fund has said.

Financial pressures on the NHS are growing, which are affecting the clinical sustainability of several hospitals, according to Professor Chris Ham, chief executive of the King’s Fund.

Professor Ham told the Observer: “The challenge of improving care by changing the locations from which services are provided is not new.

“What is different today is the financial pressures facing the NHS and the prospect that funding in England will not increase above the rate of inflation for at least four years.

“Several hospitals have large deficits and it is clear that existing services cannot be sustained either clinically or financially.

“Financial pressures are increasing by the day and will adversely affect quality unless ministers recognise the urgent need to change the way services are provided.”

Professor Ham’s comments come just days after the government unveiled changes to its controversial reform plans for the NHS after accepting the key recommendations of a panel of health experts.

In what critics labelled a U-turn, health secretary Andrew Lansley’s proposals to extend competition in health provision were scaled back after the coalition took a “pause” in its legislation prompted by unease among health professionals and Liberal Democrat MPs.

Prime minister David Cameron said: “We have listened, we have learned and we are improving our plans.”

But Labour accused the government of wasting billions of pounds by pressing ahead with an unnecessary reorganisation at a time when waiting lists are rising, with former health secretary Alan Milburn branding the watered down reforms the “biggest car crash” in the service’s history.

Professor Ham told the Sunday newspaper politicians need to take the initiative and tackle the financial problems head on.

“Up to 20 hospitals, around 10 per cent of the total in England, may not be financially sustainable and will have to be merged or taken over,” he said.

“Many others face financial or clinical challenges that require changes to the services they provide.

“Governments have ducked these issues for too long, while MPs have ignored clinical and financial evidence and backed campaigns to keep local hospitals and specialist units open. It is time for politicians to grasp the nettle.”

The professor said decision-making power should be handed over from the health secretary to the Independent Reconfiguration Panel, which currently passes on its recommendations to the minister.

This would make sure vital conclusions are reached without political pressures, based solely on clinical and financial issues, he said.

“Unfortunately, the process for ‘reconfiguring’ services is not fit for purpose,” said Professor Ham.

“Under the current system, the secretary of state is the final arbiter, with contentious decisions referred to him by the Independent Reconfiguration Panel - a body of experts charged with reviewing decisions that cannot be resolved locally.”

He added: “The time has come to distance politicians from these decisions. Giving the IRP responsibility would avoid delays under the current process and ensure they are taken on clinical and financial grounds rather than for political reasons.”