Health secretary Frank Dobson has chosen a low-profile career NHS manager to head the National Institute for Clinical Excellence, launched this week as a special health authority.

Andrew Dillon, chief executive of St George's Healthcare trust in London, is expected to take the lead in a key part of Labour's NHS reforms in his role as chief executive of NICE. Ministers want NICE to lead work on their quality agenda for the NHS.

Launching the body, Mr Dobson pledged that it would be 'dedicated to ensuring that every NHS patient gets fair access to quality treatment'. NICE will tell ministers which new and existing treatments are clinically and cost-effective.

Mr Dobson said: 'One area where NICE will have a significant impact is mental illness.'

Mr Dillon will be responsible for a£9.8m budget and 30 staff. He will spend only one day a week at NICE while he works out his notice at St George's.

He is about to sign contracts for a£50m private finance initiative project and is in the middle of budget negotiations with Merton, Sutton and Wandsworth HA over a£6.7m projected overspend for the coming financial year.

NICE started work last week with no staff, except chair Sir Michael Rawlins, Mr Dillon, a part- time finance director, and 'no- one to answer the phone', according to one insider.

Mr Dillon said: 'My priorities are to deliver the government's agenda and to get the basic organisation in place.'

His appointment surprised NHS commentators but was widely welcomed. Professor Ray Rowden of York University said it was 'good news' and that Mr Dillon would be 'a very solid pair of hands running the show behind Sir Michael'.

Commentators warned that there could be a difficult relationship with Sir Michael, who had been taking an 'almost executive role' recently, making controversial public statements, such as promising to 'bully ministers' if they rejected effective drugs.

But Mr Dillon said Sir Michael had 'a good sense of the right relationship between the chair and chief executive'.

Sir Michael 'knows much more about the organisation and how it is going to deliver than I do but I will develop that', he said.

NHS Confederation chief executive Stephen Thornton said: 'I am pleased that an experienced and top-flight NHS manager has been appointed.'

Staff at St George's also praised Mr Dillon. Unison representative Gail Adams said he was 'an effective chief executive' who had 'a good relationship with staff'.

See comment, page 13.