It is crucial that the person who heads the commission is equally committed to independence

Dame Helena Shovelton

That prompted the Conservatives to accuse Labour of being "too weak to stomach criticism".

But a spokeswoman for the Department of Transport, Local Government and the Regions insisted the Dame Helena had not been sacked.

She was leaving because her three-year term was coming to a close, the spokeswoman said.

Dame Helena has expressed her disappointment over the decision.

"I'm disappointed not to be reappointed," she told the Local Government Chronicle.

"But I've always been very independent.

"It is crucial that the person who heads the commission is equally committed to independence."

The fact that Dame Helena was not going to continue in the job was announced last week by Local Government Minister Nick Raynsford.

'Substantial change'

He said: "Over the last three years she has overseen substantial change at the Commission.

An Audit Commission report criticised some casualty departments

"Dame Helena's successor will have strong foundations to build on in carrying forward and developing into the future the Audit Commission's outstanding tradition of independent and constructive public service."

Tory spokesman Nigel Waterson MP said: "Labour are a party of control freaks too arrogant to admit failings and too weak to stomach criticism, even if entirely justified.

"Dame Helena Shovelton has been critical of the government, in particular of their Best Value regime.

"No doubt she will be replaced by one of Tony cronies as usual."

Asylum system

Some of the reports delivered by the Commission under Dame Helena's stewardship have attacked issues like the standard of care in hospital accident and emergency departments and criticised the treatment of dementia sufferers.

More recently they have criticised the Home Office system to reimburse local authorities for the accommodation costs of asylum seekers which they say gives councils "no incentive to control their costs".

And in July an Audit Commission report urged the government to take control of Hackney council's debt-ridden finances.