Foundation trusts and Monitor have warned that the details of the government’s plans to de-authorise foundations risk “undermining” the trusts and their regulator.

Monitor executive chair Bill Moyes told HSJ: “As drafted, the proposals lack clarity and potentially allow ‘second guessing’ of the operation of our compliance regime. They have the potential to undermine FT autonomy and Monitor independence.”

The proposals were set out in a consultation document published this week.

It follows Andy Burnham’s statement on the subject to the Commons last week, which said proposed new legislation would give the health secretary the power to “request” Monitor de-authorise a failing foundation trust and return it to the Department of Health’s control.

The regulator was initially satisfied with the health secretary’s description of the proposed new legislation, but is now alarmed by the details and wording of the consultation document published on Monday.

Mr Moyes said yesterday: “We recognise that the secretary of state should be able to voice concerns in cases of exceptional failure but it is essential that the principles of fair, proportionate, risk-based regulation are maintained.”

The Foundation Trust Network is also concerned. Its director Sue Slipman said: “This was supposed to be about strengthening the FT brand, but it’s actively undermining the independent regulator and therefore the FT model.”

She said the document was “not talking about de-authorisation but intervention”. She said: “Does this mean every time there is a negative story in the newspapers ministers will intervene? It’s second guessing Monitor. It’s like the knee jerk Dangerous Dogs Act. It will confirm what people have feared for over a long period of time this is what would happen.”

The consultation document says it expects the new power to be used “rarely” and in “exceptional circumstances”. It cites as examples “demonstrable poor quality, demonstrable poor governance, or a failure of leadership”. This has caused particular concern as these are already occasions that would trigger intervention from Monitor.

The consultation says the approach might also be used if the health secretary “wished to seek an explanation from the regulator for any lack of action which he believed was indicative of regulatory failure”.

Ms Slipman said: “What’s in the document is the suggestion that ministers won’t just intervene in extremis but over a whole range of regulatory issues. It’s intimidation. There are independent regulators already dealing with these issues. [The new power] could be used whimsically. If ministers have these powers they could use it any time. We are back to dropped bed pans.”

The consultation document says the case of Mid Staffordshire Foundation Trust illustrated that there could be times when public concern about failings at a hospital were so acute the public would expect the health secretary to “engage” as he or she remained “ultimately accountable for the overall performance of the NHS… including foundation trusts”.

It says a balance has to be struck between Monitor’s independence and the health secretary’s role. It rules out giving the health secretary the power to “direct” Monitor and proposes instead that they be given the power to “formally request that Monitor intervenes in a particular way” but that Monitor would “have the final decision about what action is taken”.

But if Monitor disagrees with the health secretary’s view, it would be “obliged to justify its position” within seven calendar days.

Ms Slipman said that time scale was “ridiculous”. “That’s what makes it dangerous dogs legislation,” she added, warning that, if used, the power was at risk of being “judicially reviewed from breakfast time to tea time”.

She said she “hoped” the document had been “badly worded” rather than accurately reflecting ministerial intentions. The network has requested an urgent meeting with Mr Burnham to clarify this.

A spokesman for the DH said: “The proposals we have published are for consultation - we welcome all views on these proposals including those from Monitor.”

Mr Moyes said: “We are keen to work with the department over the next few weeks to ensure that workable legislation emerges that will re-enforce what I believe is our shared commitment to a more devolved healthcare system”.

In a separate development, Mr Moyes has now been served notice that his role as executive chair will end early next year. The termination has long been expected as the DH agreed to only renew Mr Moyes’ contract for two years in February 2008.