Unions have today reacted with astonishment at the "shameful" u-turn on poaching nurses from developing countries, just two months after the health secretary, John Reid, pledged to strengthen the code of conduct on ethical recruitment.

The erosion of the code of conduct on international recruitment comes as hospitals with foundation status are to be exempt from a statutory obligation to adhere to the guidance.

A new code of practice has been drafted which stipulates that foundation trusts will now be treated like private hospitals, which are currently merely "invited" to adopt the ethical recruitment guidelines, unlike NHS hospitals which are bound by the code, the Guardian revealed today.

The decision to allow foundation trusts to opt out is likely to weaken the code, which was set up to avoid the poaching of staff from developing countries, faced with their own critical shortages.

The original code banned all NHS hospitals from advertising vacancies in developing countries unless intergovernmental agreements with those countries were in place.

In countries like South Africa, for example, the health service is affected by the number of nurses who fall prey to the HIV/Aids virus.

Karen Jennings, Unison's head of health, today condemned the government's decision to backtrack on ethical recruitment: "It's shameful that the government is considering giving foundation hospitals carte blanche to poach nurses from overseas, by exempting them from NHS rules on ethical recruitment.

"Unison has long argued that the guidelines need to be given more teeth and extended to cover the private sector. This is to try and stop unscrupulous agencies breaching the guidelines and taking staff from countries like South Africa, with no real comeback."

The Royal College of Nursing (RCN) was also critical, pointing out that the government's decision was a breach of the commitment given to nurses by the health secretary at its annual congress earlier this year.

The RCN's senior employment relations adviser, Howard Catton, said the competitive environment being encouraged in the health sector through 'payment by results', was likely to encourage foundation hospitals to abandon the code to secure the staff necessary to deliver extra capacity.

"We would be extremely concerned if this happens, because we were led to believe by the secretary of state that he planned to strengthen the code of conduct on international recruitment. He said the case clearly needed to be reviewed with a view to strengthening it."