About 400 staff are employed at NHS Logistics in Alfreton which supplies bandages, food, stationery and other products to hospitals.

The government, which has almost finalised its plans, said it must get maximum value for the patient.

Unison spokesman Charlie Carruth said there is no need to outsource.

DHL/Novation have indicated that there will be no depot closures in the foreseeable future Department of Health statement

"We think that it's not necessary. It's a successful business, it's been growing and we think it can grow further in the NHS," he said.

"We also think it will impact on terms and conditions of staff and could lead to redundancies."

But in a statement the Department of Health said it believes the change will mean jobs will be created.

"We are not privatising the service. We will be partnering with the private sector and letting a contract for the provision of the service," the statement said.

"This contract will be managed closely by the department.

MPs contacted

"The contract award is still subject to further negotiation, but it is envisaged that the contract will be awarded by the end of May 2006 - with the transfer of business and employees taking place in July 2006."

The preferred bidder to run the operation is DHL/Novation, the Department of Health said.

"DHL/Novation have indicated that there will be no depot closures in the foreseeable future and envisage that 1,000 new jobs will be created."

Mr Carruth said Unison planned to contact local MPs over the issue.