"Independent" NHS watchdog chief David Prior opened a new front in the row on political appointments yesterday with a shameless public call for further privatisation of the health service.

The former Tory Party deputy chairman blundered into the debate hot on the heels of Labour peer Sally Morgan's sacking as Ofsted chief amid claims the government is trying to pack posts with loyalists.

In a scaremongering Sunday Telegraph article Care Quality Commission chair Mr Prior claimed that NHS England could "go bust" without "more competition" and "more entrants into the market from private-sector companies, the voluntary sector and other care providers."

His intervention into the highly charged debate on the future of public healthcare - which is buckling under a massive Tory restructuring and demands for £20 billion of savings - raised questions over his December 2012 appointment under the Code of Practice for Ministerial Appointments to Public Bodies.

It states that roles should be handed to individuals based on merit and not political activity.

A Labour spokesman said Mr Prior's presence as chair of an independent regulator represented "another politicisation of public services."

"We don't think it's Prior's role as an independent regulator to make political statements about privatisation," he said, adding that the party "fundamentally disagrees" with Mr Prior's position.

"We need a public NHS that's integrated, not a fragmented one where everything's forced out to tender."

Campaign group Health Emergency director John Lister said all the evidence was that private firms could not handle the demands of running NHS services.

"Not only is it not his role but it's a completely inappropriate solution that he's talking about.

"Right at this moment, where Serco has taken over community care in Suffolk, they're being slammed for really poor quality care," he said.

Public-sector union Unison head of health Christina McAnea said: "The last thing the NHS needs is more competition.

"What the NHS is lacking is the funding from government."