Probation workers' union Napo is seeking legal advice over the government's plans to exclude existing probation trusts from bidding to provide services as part of its privatisation agenda.
The Ministry of Justice has said it plans to put 70 per cent of probation work out to competition in 2015.
This week the National Offender Management Services (Noms) confirmed that probation trusts will be prohibited from bidding to run the work they currently deliver.
This has prompted accusations that Justice Minister Chris Grayling is deliberately dismantling the service.
Probation trusts were promised new freedoms when they were formed out of the old probation boards in 2007.
But unions argue that the reality has been an erosion of the ability of trusts to run their affairs to suit local needs and circumstances.
Napo assistant general secretary Harry Fletcher said: "It is quite extraordinary that this government is considering privatising probation when it is performing better than ever before and exceeding all government targets.
"It feels as if they came up with an ideological solution and then went back to look for a problem but couldn't find one because there isn't one.
"We believe this decision breaches European procurement guidelines and we will be seeking legal advice."
Public-sector union Unison said it suspects that the decision from Noms was prompted by private-sector lobbying.
A Unison spokesperson said: "If this policy is not reversed, it will mean that the private sector will have a free run at taking over the work of probation and the public probation service will have been destroyed."
Unison national officer for probation Ben Priestley added: "We already know that the government wants to privatise more than two-thirds of the work of probation trusts, but preventing those trusts from even bidding for work they currently carry out is an astonishing admission of just how weighted this competition will be in favour of the Tories' friends in the private sector.
"Noms has a truly terrible record in procurement with a long line of botched privatisations to show for it. To now seek to exclude probation trusts from the process is anti-competitive and unfair."
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