The government will open up more than £1bn of NHS services to competition from private companies and charities, the health secretary announced on Tuesday, raising fears it will lead to the privatisation of the health service.

In the first wave, beginning in April, eight NHS areas – including musculoskeletal services for back pain, adult hearing services in the community, wheelchair services for children, and primary care psychological therapies for adults – will be open for "competition on quality not price". If successful, the "any qualified provider" policy would from 2013 see non-NHS bodies allowed to deliver more complicated clinical services in maternity and "home chemotherapy".

Andrew Lansley – admitting that the government's initial plans for competition in the NHS were too ambitious, and stung by criticism from Steve Field, the senior doctor called in by David Cameron to review the reforms, that the proposals were "unworkable" – has slowed down the rollout of competition. The health secretary said his plans would now "enable patients to choose [providers] … where this will lead to better care".

Labour questioned the policy, which the shadow health secretary, John Healey, said was "not about giving more control to patients, but setting up a full-scale market".

His colleague Emily Thornberry, the party's health spokeswoman, added that "today is a good day to announce the policy because everyone is preoccupied with telephone hacking. [They] hope no one will notice it."

This theme was picked up on Twitter with a stream of comments about it "being a good day to bury bad news".

Critics warned of "huge dangers lurking in the plans".

The trade union Unison said: "Patients will be little more than consumers, as the NHS becomes a market-driven service, with profits first and patients second. And they could be left without the services they need as forward planning in the NHS becomes impossible."

A spokesman for the British Medical Association questioned "the assumption that increasing competition will always mean improving choice.

"The ultimate consequence of market failure in the NHS is the closure of services, restricting the choice of patients who would have wished to use them." The Department of Health dismissed these charges and argued the policy would benefit patients by bringing many services out of hospitals, which would make it easier to access healthcare.

As an example, the policy could lead to patients being able to walk into a retailer on the high street or a local GP's surgery for a blood test rather than being forced to go to hospital.

One of the new policy's aims is to promote innovation, highlighting the "Tony Blair example". Abnormal heart rhythms, such as those suffered by Tony Blair, no longer need the immediate attention of a cardiologist.

Instead, a concerned patient could be treated by using the telephone to measure the heart beats and give an instant diagnosis, followed by a call from a nurse advising on whether the patient needed to go to hospital or not.

There were also major savings that could be made, the department said. It cited the example of chronic leg wounds, where the NHS pays out £18,000 per patient over four years, often without curing them. One not-for-profit company – Wound Healing Centre in Sussex – treats patients successfully for £720.

Lansley's commissioning tsar, Dame Barbara Hakin, said the NHS must push ahead with the agenda to offer patients more choice despite financial challenges and a period of "significant transition".

The NHS must save £20bn over the next four years in efficiencies.

Labour disputed the gains, saying the policy was just a step towards privatisation.

Healey said: "The Tory-led government is pushing ahead with its wasteful and unnecessary NHS reorganisation, rather than focusing on improving patient care."

Care options

From April 2012 patients receiving one of eight types of community and mental health services in England will be able to be choose to access their care or support from a private health provider or voluntary or charitable organisation, not just the NHS.

• Services for back and neck pain.

• Adult hearing services in the community.

• Continence services (adults and children).

• Diagnostic tests closer to home.

• Wheelchair services (children).

• Podiatry (feet) services.

• Leg ulcer and wound healing.

• Talking Therapies (primary care psychological therapies, adults).

These represent about £1bn of the NHS's £110bn a year activity.