The Department of Health struck a £12m deal with healthcare analyst Dr Foster without talking to any of the firm's rivals, it emerged this week.

The disclosure came as MPs accused the government of having 'very cosy relationships' with Dr Foster. They examined the role of Matt Tee, who was seconded to the DoH as acting director of communications while in Dr Foster's employ, and the relationship between Jake Arnold-Forster, chief executive of the Dr Foster joint venture, and Josh Arnold-Forster, who was John Reid's special adviser from 2005-06, when former health secretary Mr Reid was defence secretary.

HSJ has established that the two are brothers.

The Commons public accounts committee last week held an inquiry on the joint venture between Dr Foster and the DoH information centre, following a damning report last month from the National Audit Office.

At the hearing, permanent secretary Hugh Taylor told MPs that the£2m spent on market analysis before the deal to create Dr Foster Intelligence was agreed did not include any dialogue with any of Dr Foster's competitors, and that research on its main rival, benchmarking company CHKS, was 'essentially desktop-based'.

Mr Taylor was DoH group director of strategy and business development when he gained agreement from ministers to enter discussions with Dr Foster over the deal.

MPs also questioned Mr Taylor and information centre chief executive Professor Denise Lievesley about relationships between Dr Foster and the government, which Labour MP Ian Davidson described as 'very cosy'.

In particular, Mr Davidson raised the question of whether anyone at the company 'could be considered to have had some sort of inside track to the NHS or to government by being a special adviser or anything similar'.

Mr Taylor said: 'Could I say that it is certainly the case that members of Dr Foster, before we did this deal, saw it as part of their job to be well networked, to have dealings with ministers, special advisers and so on?'

Questioned about whether any of these were specifically special advisers, he said no, but asked whether there was 'anything similar that could cause concern and a feeling that they had an inside track which was not available to anyone else', he brought up a Private Eye story examining the move of a Dr Foster employee into the DoH.

After stressing that there was 'no particular issue about that', he later confirmed that Matt Tee, now DoH communications director, was given the job on an acting basis while on secondment from being business development director of Dr Foster's.

But Conservative MP Richard Bacon raised the issue of another relationship.

He asked Professor Lievesley what the relationship was between Dr Foster Intelligence chief executive Jake Arnold-Forster and Josh Arnold-Forster, former special adviser to John Reid.

Professor Lievesley said she had not heard of Josh Arnold-Forster, and Mr Taylor said he would establish what the relationship between the two was.

A spokeswoman for Dr Foster told HSJ that Jake and Josh Arnold-Forster are brothers.

The committee is expected to report its findings in July.

Read the transcript of the committee hearing here