The government has rejected Labour's claims that the decision to allow a private firm to take over Hinchingbrooke hospital in Huntingdon is part of a wider plan to privatise the NHS - pointing out that the tendering process began under the last Labour government.
Circle, a private firm which is part-listed on the London Stock Exchange, is to take over the hospital in Cambridgeshire, from 1 February next year.
The £1bn, 10-year deal will see Circle assume the financial risks of making the hospital more efficient and paying off its debts, but the hospital will stay in the NHS.
Shadow health minister Liz Kendall, in an urgent question in the Commons on 10 November 2011, said people would be concerned about the "unprecedented arrangement".
She claimed the deal revealed the government's "true vision" for the NHS and called on ministers to withdraw its controversial Health Bill currently making its way through Parliament.
She also called into question Circle's "close links" with the Conservative Party and asked for "full transparency" on the deal.
Health Minister Simon Burns said he was "speechless" by Ms Kendall's "sheer effrontery" given that the process had been started by Labour.
He insisted the move was in the best interests of patients and would secure the hospital's long-term future, stressing: "It is not privatisation in any shape or form."
He told MPs the trust had a £39m debt and there had been concerns over its stroke and cancer services.
Conservative MP Robert Syms said the move would lead to better NHS services for people that live in the area and, acknowledging the minister's reassurances, added that "if it doesn't there will be changes".
But John Healey, a former Labour health spokesman, claimed the hospital was being privatised which "is wrong in principle and it is wrong in practice".
Mr Burns shot back: "If it is a privatisation, which I utterly reject it is, if it is wrong then his government gave the powers to do this in legislation and his successor, as the shadow health minister and the secretary of state, instigated the proceedings to bring this about.
"So it is a bit odd for him to then for narrow, grimy, party political reasons, try to blame us for something we're doing that he and his party instigated."