Private companies will be reluctant to bid for future NHS contracts, the Confederation of British Industry has warned.

The claims were made as the Department of Health published the framework it will use to consider compensation claims from companies that had bid to run independent sector treatment centres before the DH cancelled more than half of them.

The CBI said the procurements had been "terribly mismanaged" and some companies had told the CBI privately they would be reluctant to bid again. "They do not feel that the DH has acted as a good partner and somebody they can trust in these sorts of procurements, and the aftershock of this will last for many years to come."

A CBI spokesman welcomed the framework, describing it as a positive step, "because in the past they have refused to address this".

The framework says compensation will be considered only for companies appointed as preferred bidders for costs incurred at this stage. Only direct costs of the sponsors and primary subcontractors plus invoice costs for services that would usually be provided by third parties will be refunded.

Indirect costs incurred by subcontractors will usually have to be borne by the subcontractor.