North West regional office has been forced to suspend the appointment of new primary care trust chief executives after it faced the threat of legal action after claims that the procedure was flawed.
The region, where 65 primary care groups are to be transformed into 30-40 PCTs over the next two years, had decided the posts should only be open to people from within the region.
A regional spokesperson said: 'We were mindful of national guidance which talks about the need to avoid redundancies, ensuring that available skills and experience are not lost to the health service.
We therefore - after full consultation with health authorities - decided that applications for the first round should be limited to those people directly affected by those changes. '
But the process caused outrage among potential applicants from outside the region, who complained to the National Association of Primary Care.
Chief executive Clive Parr said: 'You had the situation that people in the north west could apply for posts anywhere in England, but people elsewhere in the UK were prevented from applying for jobs in the north west. '
The association took the matter up at regional level and then with health minister John Denham.
'We didn't get as far as a legal challenge. We gave them the opportunity of putting it right without a fuss. I've no doubt it was done with the best of intentions. But we are a national service. You can't have one region making up the rules as it goes along at the expense of people elsewhere in the country, 'Mr Parr added.
Interviews had already taken place and appointments were due to be announced last week, but the process has now been suspended while a national advertisement is placed.