NHS bosses have urged ministers to scrap controversial legislation that has led to the widespread privatisation of healthcare as part of a major revamp of the health service.

NHS England outlined detailed plans that would repeal key parts of the Health and Social Care Act 2012 to squeeze out private providers such as Virgin Care and let the NHS deliver more of its own care again.

The proposals include axing regulations that have allowed profit-driven health firms to win NHS contracts in England worth about £10.5bn in the five years after the act came into force in April 2013.

At its monthly board meeting on Thursday, NHS England published plans that, if adopted by ministers, would dismantle large parts of the shake-up instigated by Andrew Lansley, who was health secretary in the coalition government from 2010 to 2012.

Theresa May has acknowledged that the 2012 act, which is widely considered to be the most damaging ever to afflict the NHS, is hindering a drive by the health service in England to provide better care by integrating key services.

Section 75 of the act and the public contracts regulations 2015 together force clinical commissioning groups in England – which hold the NHS budget locally – to put any contract for care worth more than £615,278 over its lifetime out to tender. That led to a significant expansion in the amount of care provided by firms such as Virgin Care and Care UK.

Virgin Care, which is owned by Richard Branson, holds more than 400 contracts.

In a document outlining its ideas, NHS England said: “We propose that the regulations made under section 75 of the Health and Social Care Act 2012 should be revoked.” It instead called for a “best value” test.

It said the increased competition arising from the regulations has wasted NHS time and resources. “Current procurement legislation can lead to protracted procurement processes and wasteful legal and administration costs in cases where there is a strong rationale for services to be provided by NHS organisations, for instance to secure integration with existing NHS services.”

NHS England has launched a two-month public engagement process on its proposals. The Commons health and social care select committee will also hold an inquiry and carry out pre-legislative scrutiny of whatever proposals for reform ministers put forward.

Simon Stevens, NHS England’s chief executive, said it wanted to see “if some targeted changes could be made to the law”.

Paul Evans, who runs the NHS Support Federation, which tracks privatisation in the health service, welcomed the move. “The Lansley reforms have been a damaging and wasteful experiment in forcing competition on the NHS and inviting in the private sector.

“The market-based experiment has led to the collapse of multiple contracts, to patients getting substandard care or the denial of it altogether, and to the huge waste of public resources.”

NHS England made clear that the ambitions outlined in its long-term plan, the blueprint it unveiled last month, could be implemented under existing legislation, “but legislative change could make implementation easier and faster”.

Matt Hancock, the health secretary, said: “We want to help foster an even more ambitious, innovative culture in the NHS and ensure it’s never victim to unnecessary bureaucracy. We are prepared to consider what changes may be necessary to make those ambitions a reality more quickly, including potentially changing the law.”

Niall Dickson, the chief executive of the NHS Confederation, which represents most health service trusts, backed the plan. “Many aspects of the 2012 NHS reforms are no longer fit for purpose. These proposals should remove some of the barriers to effective collaboration [and] reduce the burden of the current procurement regime.”

Under the proposals, the Competition and Markets Authority’s power to block mergers between hospital trusts would transfer to the regulator NHS Improvement. This is likely to lead to a series of mergers, some of which the CMA has rejected.