The decision to sack Sir Colin Walker as chair of the National Blood Authority has been widely applauded.

Health secretary Frank Dobson told the Commons that Sir Colin had to go in the wake of Professor John Cash's 'damning' report into the NBA's decision to downgrade the Liverpool blood centre. This also raised wider concerns about the mismanagement of the transfusion service.

'I called in Sir Colin to say that. . . as a general principle, I believed those at the top of an organisation had to take responsibility, ' said Mr Dobson. 'He has refused to resign. So today I have dismissed him.'

Liberal Democrat health spokesman Evan Harris, who has repeatedly called for Sir Colin's resignation, said the report 'confirms that the Tory rationalisation of the health service was a disaster'.

Roger Kline, national secretary for health for the Manufacturing Science and Finance union, also said 'Tory appointees' had set about 'wrecking' the service, leaving staff 'demoralised'.

Shadow health minister Patrick Nicholls welcomed Sir Colin's dismissal, saying there had been a 'chronic defect in management and leadership' at the NBA.

Professor Cash, a former director of the Scottish transfusion service, was asked to investigate clinical concerns about moving blood testing and bulk processing from Liverpool to Manchester.

A vigorous local campaign against the move was mounted after the general election, but it went ahead after Professor Cash found the plans were 'largely implemented' in an interim report last September.

The final report concludes the move 'severely damaged' the Liverpool centre and 'there is a serious crisis and widespread loss of confidence between clinicians. . . the general public and the NBA which must be tackled'.

It describes the savings made by the transfer as 'extraordinarily modest' and does not rule out reversing the decision after a year of monitoring.

Kevin Greene, Unison's chief negotiator for blood transfusion staff, said he was 'disappointed' the decision would not be reversed immediately, but said a review in a year was 'a welcome compromise'.

Some of Professor Cash's sharpest comments are reserved for the general management of the NBA, which took over transfusion services from regional offices in 1993.

His final report says market principles of 'charging for blood and blood products' may have contributed to 'a central management structure and a command-and-control culture (at the NBA) that have insufficient regard for the views of customers, staff, patients and the service'.

But it also criticises the NHS Executive for being 'too close to the NBA' and failing to monitor its plans effectively.

Professor Cash further accuses the NBA of making 'misleading' statements about its performance.

The decision to downgrade the Liverpool blood centre was part of a wider shake-up of the transfusion service that also led to the downgrading of the Oxford, Cambridge and Lancaster blood centres.

Last August, the NBA sent a press release to the Journal and other news organisations saying that 'in all three areas. . . the quality of our service to hospitals has improved'.

Professor Cash's report says his visits to Oxford and Cambridge revealed there had been serious problems and the press release 'was not only misleading but a very grave error of judgement'.

Sir Colin will be replaced by Mike Fogden, former chief executive of the employment service.

NBA spokeswoman Sue Cunningham declined to comment on his dismissal or any aspect of the report.