Credit rating agencies such as Standard & Poor's and Moody's will be asked to assess whether hospitals are financially robust enough to treat patients under proposals put forward by the government's NHS regulator.

The agencies – blamed for failing to spot the credit crunch in 2008 and currently engaged in a diplomatic row over their downgrade of eurozone countries – would be required to vet the financial strengths of any provider of NHS services in case they go bust.

In a series of papers, Monitor, the NHS regulator, proposes replacing its current assessment, which looks at clinical quality and how well hospitals "co-operate" in the NHS, with a new regime that will ask "major credit ratings agencies (Standard & Poor's, Moody's and Fitch)" to give "a clear indication of the financial strength of the [healthcare provider] and the perceived capabilities of its board and executive team".

Under the proposals, any provider, either a hospital trust or private company, that failed to achieve an "investment grade" rating – BBB- by Standard & Poor's, Baa3 by Moody's and BBB- by Fitch – would risk losing its licence to operate in the NHS.

A similiar system works in the electricity market, giving the regulator warning of financial difficulties building up in the system.

But critics say the NHS is on a course to repeat the failures of the banking crash by inviting credit rating agencies into such a central role without properly considering other factors such as whether hospitals are delivering good quality healthcare. "Ratings agencies do not have a health, let alone an NHS, perspective and are by definition interested solely in financial bottom lines," the Institute for Public Policy Research warned.

Andy Burnham, the shadow health secretary, said: "This news will send a chill wind through the NHS."

Monitor emphasised that its paper was a consultative document, and it would apply its current regime of oversight of foundation trusts that faced "significant risks" of failure until 2016.

Officials said the new regime would impose borrowing limits on providers and lock them into running services even if they prove unprofitable. Under the changes, Monitor will oversee competition between foundation trusts, private providers and social enterprises for patients in both the NHS and social care.

The health secretary Andrew Lansley's bill, which has been stuck in parliament for a year, is facing an onslaught from opponents. On Thursday the Royal College of Nursing will declare its all-out opposition to the proposals, calling them a "serious threat" to the NHS.

The British Medical Association, representing doctors and medical students, on Wednesday threatened its first outbreak of industrial action in more than 30 years after rejecting pension reforms.

Labour called on the government to "drop the bill and put the NHS first". Burnham said: "People will shudder at the thought of an NHS at the mercy of the money markets, where profits come before patient care. It signals the end of a collaborative NHS, where one hospital stands behind another, to a full-blown commercial market with each fending for themselves. If further proof was needed that Lansley's bill is the end of the NHS as we know it, then this is surely it."

The Department of Health referred questions to Monitor. A Monitor spokesperson said: "The health and social care bill proposes that Monitor becomes the sector regulator for health and, at a later date, for adult social care. Monitor's core duty would be to protect and promote patients' interests. In the medium term we would also have a continuing role in assessing NHS trusts for foundation trust status, and for ensuring that foundation trusts are financially viable and well-led, in terms of both quality and finances.

"In carrying out our sector regulator role, Monitor would license providers of NHS services in England and exercise functions in three areas – regulating prices; enabling integrated care and preventing anti-competitive behaviour; and supporting service continuity. We are currently consulting on how to implement the government's planned legislation. We have published proposals on the conditions of the licensing regime to ensure all stakeholders have the opportunity to contribute to our thinking at an early stage."

The IPPR's associate fellow, Joe Farrington Douglas, wrote that credit rating agencies were "not equipped to ask any questions about the ethics or compassion of healthcare providers or to review whether the central purpose of the health service – to deliver good quality healthcare to those in need – is being delivered."

Farrington Douglas noted that the US financial crisis inquiry commission called the three agencies "key enablers of the financial meltdown". He says that the new system will be riven by "conflict of interests" within the NHS which risks repeating the mistakes of the collapse of Southern Cross. "The consultation document implies that providers will have to pay one of the agencies in return for a rating. If so there is a conflict of interest with providers having an incentive to select the agency that gives them the lightest touch and best rating, perhaps allowing them to hide the risks of splitting operations from property, as happened in the broken Southern Cross model."