More than 100 local bodies would be merged under proposals to move away from internal health service competition and make parts of the NHS work more closely together.

The request for new laws by Simon Stevens, head of NHS England, sets the government up for a battle in the Commons. The reversal of the reforms is also likely to prove embarrassing for the Conservatives. Labour has already demanded an apology for a “bureaucratic disaster” that it says wasted billions.

The Health and Social Care Act 2012 made local GP groups “customers” to buy services from competing hospitals and other providers. It provoked opposition from health unions who said that it would fragment care. Senior Tories came to regard it as the coalition government’s biggest mistake.

Ministers will seek to present the changes as commonsense tidying up measures requested by the NHS. They hope that this will avoid a divisive political battle, but while opposition to privatisation was a key Labour objection to the act the party is unlikely to back a Conservative NHS reform.

In the ten-year plan Mr Stevens argues that there are too many NHS institutions working autonomously when they need to work together to join up care for patients. While arguing that his plan could be achieved in current structures, he said that changes to the law “would support more rapid progress”.

Matt Hancock, the health secretary, said: “We want to foster a culture of ambition and innovation in the way our health sector organises the services it delivers. I am prepared to make the changes necessary for this to become a reality, including changing the law.”