One of the government's most successful initiatives to help older people is in danger of disintegrating as the NHS shifts resources into a private sector scheme promoted by a former adviser to Tony Blair, a senior Department of Health official warned yesterday.

Ian Philp, the older people's tsar, said the £1.4bn programme to support such patients after an operation had dramatically reduced the number of so-called bedblockers, people who have to stay in hospital longer than is medically necessary.

He said more than 300,000 people a year in England were benefiting from rehabilitation services provided by local authorities to bridge the gap between hospital and home.

A progress report next week will say that the development of these "intermediate care" facilities has cut delayed discharges from hospital by 60% since 2001. The extra bedspace released is "equivalent to building eight new district general hospitals".

But in an interview with the Guardian, Dr Philp warned that this achievement was at risk as resources needed to support it were being sucked into an alternative project to help older people avoid the need for hospital treatment.

The prime exponent of the new approach is United Health, the $28bn US corporation which, in May, recruited Simon Stevens, the prime minister's former health policy adviser, as president of its European operations. The company is piloting its Evercare programme to identify older people at risk of hospitalisation in nine primary care trusts in England.

The government's five-year plan for the NHS, published in June, included a pledge that every PCT in England would adopt this approach by 2008, although there will be no obligation on them to sign contracts with United Health.

John Reid, the health secretary, told the Labour party conference last month of plans to appoint 3,000 community matrons for the scheme.

Dr Philp said he supported attempts to help older people manage long-term medical conditions, but there was a danger that trusts would stop investing in rehabilitation and switch resources into preventive care. The sensible approach would be to provide both. "We could snatch defeat from the jaws of victory if we stop investing in community services for older people," he said. "There is a risk that people may take the gains made from investing in intermediate care for granted because they are excited by the ... potential of long-term conditions programmes, such as the Evercare model, to deliver reduced hospital bed use."

His warning came as the department prepared to publish a rave review of intermediate care, explaining how it helped 331,721 people last year. It says that in June 2004 only 4.67% of all 75-year-olds in an acute hospital bed were experiencing a delayed discharge, compared with 12% in September 2001.

Under the scheme, the NHS paid a third of the cost of intermediate care and social services departments covered the rest. Councils are fined £100 a day (£120 in London) for each patient forced to stay in hospital because support services are not available.

· The Institute for Public Policy Research, a Blairite thinktank, called for a review of social care yesterday. Deborah Roche, the senior research fellow, said: "Any future cuts to social care may impact on the attempt to transform the NHS from a sickness service into a health service."