Bethlem and Maudsley trust chief executive Eric Byers attacked bidding systems used to distribute modernisation funds as 'modelled on the National Lottery'.
'We bid for what's fashionable - not what is relevant to our local needs,' he said, adding that the way modernisation funds were allocated was 'laughable' when compared with rates of morbidity and mental health.
Mr Byers told the NHS Executive's Martin Brown that his request for revised systems was 'not a question, but a plea'.
Promising that the Executive intended 'to distribute the money differently next year', Mr Brown said: 'I am not a big fan of money you have to bid for.' But he defended its current use as a quick way of ensuring money got to the places that needed it.
Mr Byers told HSJ that he was 'not reassured' by Mr Brown's words. 'I am concerned with the proportion of funds given on a bidding basis. If we do have to bid for funds, we at least need clarity on the criteria they are looking for.'
And Mind chief executive Judi Clements appealed for adequate levels of funding to ensure that 'good ideas don't get translated into bad practice'.