Patients are to be given the power to petition local health bosses to force changes in services under proposals put forward by ministers.
GPs and hospitals are already facing greater private sector involvement
A petition would need to be signed by 1% of the population to trigger a formal response from primary care trusts which commission local services.
Ministers believe it will give the public a "more powerful voice".
They also said firms were being invited to run PCT services in an extension of private involvement in the NHS.
An advert was pulled from the Official Journal of the European Union two weeks ago after it implied private firms could take control of PCTs, which control 80% of the NHS budget to buy in services from hospitals, GPs and community services.
The government said the plan was to allow PCTs to "pick and mix" the services they want to outsource to allow them to take advantage of specialist skills the private sector has.
This could include handing over responsibility for data collecting, analysis and procurement but ministers said PCT boards would still remain accountable for the services.
Health Secretary Patricia Hewitt said it will mean the taxpayer gets "better value for money", while the quality of care will improve.
However, it means private firms are being given an opportunity to get their hands on local NHS budgets, which much of the medical profession remains against because it means firms will be involved in commissioning services and providing care, creating a potential conflict of interest.
Alex Nunns, of anti-private campaign group Keep Our NHS Public, said the plans amounted to the same as what was proposed in the pulled advert, but just added a "veneer of public accountability".
"As we have found out with PFI schemes, private managers can run rings round public sector managers."
The move to give patients more power over local services was also criticised.
If a petition was signed by 1% of the local population it could demand changes to any NHS service if they were unhappy with the standards of care being provided. If it was a specialist service, a response would be triggered if a tenth of users signing up.
However, while the PCT would be duty bound to respond and put in place an improvement plan, it would not have to do exactly as the public wished.
At the moment, the pubic is consulted on new services that are being introduced but, because of a loophole, they do not have to be asked about changes to existing services.
Ministers said patient power will be further boosted by the setting up of patient bodies called Local Involvement Networks (LINKs) to take on the responsibilities of patient forums.
Each NHS trust has a forum to monitor and advise local services, but they have been criticised for being too hospital-centred.
LINKs will be based on wider geographical areas than those covered by individual trusts with the hope of giving patients more of a say over how community services are run.
Ms Hewitt said: "It is about giving patients a more powerful voice in how their NHS is run."
And Peter Cardy, chief executive of Macmillan Cancer Support, added it was a welcome move as long as it was adequately funded."
But shadow health secretary Andrew Lansley said the proposals were "limp and ineffective".