The NHS has caused controversy by handing the US spy technology company Palantir a £330m contract to create a new data platform, triggering fears about the privacy of patients’ medical details.

The move immediately prompted concerns about the security and privacy of patient medical records and the suitability of Palantir to be given access to and oversight of such sensitive material.

NHS England has given Palantir and its partner Accenture a five-year contract to set up and operate the “federated data platform” (FDP). This software will allow individual health service trusts as well as the NHS’s 42 integrated care systems – regional groupings of trusts – to “talk” to each other digitally and share data in an effort to improve care, cut waiting times and make the service more efficient.

But its creation has been overshadowed by Conservative, Labour and Liberal Democrat MPs, as well as tech, medical and civil liberties groups, voicing unease about Palantir, the potential for patients’ data being mishandled and also whether patients will be able to opt out of the FDP sharing their data.

NHS England says patients will not be allowed to opt out but it will anonymise all data before it is shared and it will not be used for “direct care”. Campaigners are already warning that they may launch a legal challenge to the denial of a right to opt out.

Palantir is known for working closely with intelligence agencies and military organisations around the world, such as the CIA and the Ministry of Defence. Peter Thiel, its billionaire founder and chair, backed Donald Trump in his 2016 presidential election.

Thiel, a libertarian, told an Oxford Union debate in January that the NHS makes people sick and should be privatised, and that Britons’ attachment to it showed they were exhibiting “Stockholm syndrome”.

Matthew Taylor, the chief executive of the NHS Confederation, said the platform would be “game-changing”. He said: “Clinicians will be able to access live data of available theatre slots, staff availability and individual patient data suitable for particular procedures at the touch of a button.” It could also help the NHS improve waiting times for treatment, he added.

But he also warned that the NHS’s unhappy previous history of trying to bring its huge stores of data together could mean it struggles to convince the public of the project’s potential benefits. “We know, like its predecessors, that the FDP for some patients will create fears of data privacy and access, and that giving permission, full access and control over health data to one sole international provider will be alarming.”