The NHS threatened to sue one of its own hospitals if it publicly said the decision to privatise cancer screening would risk patient safety.
Oxford University Hospitals NHS trust was threatened with a lawsuit for agreeing with MPs, doctors and patients, in what is thought to be the first case of its kind.
The trust planned to appeal against a decision to hand its cancer screening over to a private firm but backed out after a phone call from NHS England’s chairman.
NHS chiefs argued in a letter seen by The Guardian that the statement that patients’ safety was put at risk would be defamatory if repeated, meaning they would damage the health service’s reputation.
The scandal erupted last year when private company InHealth won a contract to provide a cancer scanning service for the trust.
InHealth had wanted to move PET-CT body scanners out of one of Oxford’s hospitals to its own site – but has since been stopped from doing so.