Britain's business regulatory body, the Office of Fair Trading (OFT) has launched an inquiry into the country's private healthcare sector, following complaints by new entrants that the industry does not foster competition, reports the Times.

The relatively young private hospital company Circle, has reportedly lodged a complaint with the OFT where in it argues that the bigger private hospital companies have taken nearly 80 per cent market share control through strategic partnerships with insurance firms.

Circle alleged that insurers have refused to cover patients at its newly opened hospital in Bath, in favour of the older General Healthcare hospital.

The agency which has already finished a preliminary inquiry into the matter has yet to decide on whether it will be continuing with a full-blown probe.

"The OFT is interested in issues of choice and competition in healthcare markets. We are considering the possibility of further work in this area, but at this stage no decision has been taken," said an OFT spokesperson.