Chief executive Anna Walker said the commission had spent months developing the indicators, which flag up leadership failures.

The Healthcare Commission has abandoned plans to rate senior managers on their leadership skills as part of the annual health check.

The organisation consulted on the move in the spring after arguing that poor leadership skills was often a major cause of poor financial performance and services.

But it has shelved the proposals following opposition from foundation trust regulator Monitor, strategic health authorities and managers' representatives.

However the ratings scheme will be retained by the commission as a tool to help improve managers' skills where an organisation is deemed to be failing.

Chief executive Anna Walker said the commission had spent months developing the indicators, which flag up leadership failures.

'The rationale behind it was that, if one is concerned about a failing organisation, it is often because the leadership is not so good,' he said. 'On the other hand, it is possible to have a failing organisation that you might not intervene in because you have confidence in the leadership.'

The proposal was part of a wholesale consultation on the future of the commission's annual health check, and the leadership score would have been part of the developmental standards.

Monitor and SHAs were concerned the plan would overlap with their performance assessment roles.

A Monitor spokesman said: 'At the time we agreed it was right for the Healthcare Commission to explore this idea, but that it had to be done in a way that didn't prejudice Monitor's ability to exercise powers of intervention.

'While we very rarely use these powers, we need the full freedom to employ them when they are needed.'

And Managers in Partnership national officer Jim Keegan welcomed the change of heart. 'The proper performance assessment relationship is between employer and employee.

'There should be no outside influence,' he said.

'All of these senior jobs are very political and if there is a danger people's employment security could be taken away by inaccurate external reports, we won't attract people to the jobs and will lose them to other sectors.'