For sale: Your private medical records

According to research out today, the Bill - which will radically alter the way the health service deals with patient data - will inevitably lead to erosion of the quality of data available for medical research and scrutiny of the health service.

Simon Davies, visiting fellow at the London School of Economics and editor of the research, said he was still at a loss as to why the government should seek such wide-ranging powers to grab patient data.

He said: "The only reason I can think of is economic. You've just got to think for a moment that the data is worth several billion pounds to reach some very worrying conclusions."

Dr Liam Fox, Tory shadow Health Secretary, today called the Bill "unacceptable", saying it was unthinkable for the Secretary of State for Health to have access to confidential patient data.

The controversial clause in the bill - which goes alongside wide-ranging reforms of the NHS IT infrastructure - gives the government the theoretical power to pass on confidential patient data and limit public access to non-sensitive anonymous records.

Activists say this will prevent external scrutiny of the NHS, especially important in the light of recent health service scandals. Vanessa Bourne, chair of the Patients Association, said: "After the catalogue of horror at Alder Hey, Bristol and the Harold Shipman case it seems utterly bizarre the government should try to limit scrutiny of the Health Service in this way."

At the launch of the research today, the controversial Bill was branded "sinister" by one cross-bench Lord, after being labelled "deeply worrying" by Tory Earl Howe last week. The Bill is currently working its way through the House of Lords.

The Bill's opponents are also concerned the government will use its new powers both to gain revenues for the Health Service through the use of the data, and to share the data between government departments without patient consent.

The government has said on previous occasions that it believes the Bill's provisions do not breach the Data Protection Act and are necessary to facilitate services such as cancer registries. However, the Office of the Data Protection Commissioner has admitted it was not consulted over the Bill.

The Department of Health was unavailable to comment at the time of writing.

Today's report was commissioned by The Nuffield Trust to look into Clause 67 of the Health and Social Care Bill. Also present at the launch were representatives of the Patients Association, the Association of Community Health Councils of England and Wales and the Foundation for Information Policy Research.