Labour’s Alex Sobel, Richard Burgon, Fabian Hamilton, Hilary Benn and Rachel Reeves voiced concerns over the proposal by Leeds Teaching Hospitals NHS trust in a letter to chief executive Julian Hartley.

They raised fears that the formation of the company could see some NHS staff employed on less favourable terms and conditions than others.

Yesterday, the trust board decided to allow more time to consult staff over the plan, which would affect estates, facilities, procurement and clinical engineering workers.

Sign up to our daily newsletter The i newsletter cut through the noise Sign up Thanks for signing up! Sorry, there seem to be some issues. Please try again later. Submitting...

The MPs said: “Whilst we welcome the extended consultation period, we do not believe than any degree of consultation will mitigate the reasonable and far-reaching concerns expressed by NHS staff.”

The trust has said it intends to keep staff who are transferred to the company on their current terms and conditions.

But the MPs’ said: “A subsidiary company, whether wholly-owned or not, has the potential to deprive staff of the terms outlined in their contracts.”

They added: “Privatisation of the NHS is an insidious process and we must guard against decisions that see us sleepwalk in the direction of a US-style private healthcare system.”

Julian Hartley said yesterday: “I look forward to receiving the MPs’ letter. I have offered to meet with all local MPs to discuss our proposals and their concerns in detail and I remain committed to doing so.

“Our board has today agreed to defer any decision to allow time for more engagement with our staff and stakeholders.