Health secretary Andrew Lansley will invite doctors, nurses and other healthcare staff to take what will be seen as another step towards privatisation, by forming "mutuals" which will contract with the NHS to provide care for patients.

Lansley will announce a "right to provide" for staff right across the NHS. Healthcare professionals in specialised areas, such as eating disorders, alcohol and drug detox, mental health and sexual health, could set up their own organisations with mutual ownership.

These would exist outside the NHS but be contracted to provide care. They will run their own budget, lease NHS equipment and the premises where they provide treatment and decide how to organise care without reference to trust managers.

Speaking ahead of the announcement at the social enterprise coalition annual conference, Lansley said: "We want to modernise the NHS to make it more responsive to patients, not top-down controls.

Arbitrary rules and central targets stifle the energy and ambition that all health professionals need to improve patient care.

"That's why we're giving staff greater control of their organisations. By handing responsibility and power to the frontline, a variety of services will develop, which in turn will give patients a real choice about the kind of care they want to receive".

The Department of Health expects that the mutuals will all choose to become social enterprises, because that will allow NHS staff who join to retain their health service pension.

Initially, the mutuals will probably be able to offer services without tendering and competing for a contract – but as time goes on, that is likely to change and competition will be allowed.

The department says, however, that mutuals that are in place and successful will have an inherent advantage if competitors emerge.

The NHS Confederation, representing employers, said mutuals could motivate staff but the British Medical Association warned of potential chaos.

Dr Mark Porter, Chairman of the BMA's Consultants Committee, said: "Doctors and other healthcare professionals are qualified to provide excellent care, but we believe the NHS should remain in the hands of the public.

"It is hard to see how the NHS can operate effectively if lots of bits of it are in private hands – even if they are those of former employees.

New mutuals could quickly find themselves in conflict with each other, and at risk of being out-competed by private healthcare giants. The consequence could be financial and operational chaos."

Jo Webber, deputy policy director at the NHS Confederation said motivated staff in mutual schemes could become more productive and likely to drive innovation and improve quality.

But she warned that staff considering setting up such schemes "will have to factor in uncertainties about what services GP commissioning consortia will want to purchase".

"Given that GP commissioning consortia do not yet have formal responsibilities, mutual schemes will need to build in the risk of the market they are venturing into," she added.

Lansley's is the first department to push forward on an announcement made by Cabinet Office minister Francis Maude in November, who said that all public sector workers are to be given a "right to provide".

The government believes this will "challenge traditional public service structures and unleash the pent-up ideas and innovation that have been stifled by bureaucracy," Maude had said, adding: "When staff are given a stake in shaping services, productivity and efficiency has been shown to improve dramatically."

In theory, any group of NHS staff could turn themselves into a self-contained mutual to offer their services. In hospitals, it would be possible for diabetes care to be organised in this way, for instance.

In practice, the service would need to be one where the premises, such as hospital wards and operating theatres, are not used for anything else. None of the assets will belong to the mutual – they will be leased from the NHS.

Some mutuals have already started up in community services, where the jargon is "right to request" rather than "right to provide".

Inclusion Healthcare in Leicester offers a GP service, drop-in centre, outreach and night shelter for homeless people, for instance, while the City Health Care Partnership in Hull offers community-based treatment, early interventions and the promotion of healthy lifestyles to local people.

Shadow health secretary John Healey said last night: "The mutual movement is based on an ethic of cooperation, and Labour already introduced a right to request to form a social enterprise in the NHS. But what the Tory-led government has planned for the NHS is based fundamentally the ethics of the free market."