MPs investigating private healthcare have called for two different systems to regulate pay beds in NHS hospitals.

Trusts should take responsibility for the 'clinical procedures and management' of private units 'operated within the management of the NHS'. But units 'operated by a company on behalf of the trust' should be regulated by a new watchdog, according to a health select committee report on the regulation of private and other independent healthcare.

Private treatment costing£265m was carried out in NHS hospitals in 199798 and a fifth of all pay beds are in NHS trusts.

The report is deeply critical of the private healthcare system. But MPs rejected calls for the private sector to be brought under the same regulatory system as the NHS.

Instead, the report says the government should appoint an independent regulator 'for healthcare outside the NHS' who should be 'informed by' the Commission for Health Improvement, the National Institute for Clinical Excellence and the Mental Health Act Commission.

The committee attacked the existing regulation of the private sector by health authorities as 'inadequate to its task'. It criticised the system of registering independent hospitals, saying it 'emphasises inspection of facilities but neglects clinical standards'.

If the committee had its way, private facilities in trusts would have to take part in national clinical governance procedures and quality assurance.

Only consultants 'with a current service contract or honorary contract with that trust should be able to admit and treat private patients.'

Private patients at these units would have access to the NHS complaints procedures, including the health service commissioner, for the first time. The committee called on the General Medical Council to prevent clinicians suspended from their NHS jobs continuing to work in the private sector. The GMC should notify 'all employers' of suspensions 'that occur as a result of activities placing patients at risk'.

The British Medical Association welcomed the proposals. A spokesperson said: 'We strongly support the principle of regulation to bring the private sector up to the same standards as the NHS.

'There is a clear need to ensure that some of the less reputable clinics and practitioners who have caused so much public concern are brought under increased scrutiny.'

An NHS Confederation spokesperson gave the report broad support, saying it was 'in line with our evidence to the select committee'.

The report, which demands that independent providers meet the full cost of a regulatory system, comes as the government is consulting on ways to monitor the private sector.

The Regulation of Private and Other Independent Healthcare . Stationery Office.£10.60. 0345-023474.£10.60.