The government has sacked Audit Commission chair Dame Helena Shovelton in what is being seen as an attempt to silence her over criticism of the organisation.
She has said she is nervous about the future of the organisation if the commission's board members feel unable to speak their minds.
She was popular with the other board members and was widely expected to serve a second term. No clear reason was given but a spokesman for Mr Raynsford claimed Dame Helena had decided not to reapply for the position.
'That's absolutely untrue,' she told LGC. 'The first I heard was when I was told I wasn't going to do it. The only statement they made was they wanted a different direction for the commission.'
Dame Helena has shaped the organisation's approach to best value and inspection in the past three years, but it is thought her removal is an attempt to gag her from voicing concerns about the commission's work.
She claims it was her commitment to maintaining the Audit Commission's independent voice that resulted in her failure to be reappointed.
'I'm disappointed not to be reappointed But I've always been a very independent person,' she said.
'I'm deeply concerned my successor will not feel able to speak out. The organisation could lose its credibility.'
She has a reputation for speaking her mind. She resigned as chair of the Lottery Commission after a row over the granting of the next lottery licence.
One of the members of the Audit Commission board said: 'She could have said something the government didn't like about best value. It's reasonable to say best value is very unpopular for political reasons. It has come in for criticism from all sides.
'It was supposed to be a panacea to replace compulsory competitive tendering but the system is opening cracks in the government's armoury.'
Commissioner Sue Richards, who is professor of public management at the University of Birmingham, said: 'The decision not to re-appoint her is very strange considering she has been such an effective chair.'
Audit Commission controller Sir Andrew Foster said: 'She is a very active chair with a lot of energy, drive and determination. She has always been prepared to meet people at the front line of services and what matters to poor and deprived people is what matters to her.
'The truth is any issues related to the reasons for her not being re-appointed lie
with the DTLR. Whatever they say, that is the reason.'
Mr Raynsford said: 'She has shaped the commission's contribution to inspection and the best value regime. This has been a challenging process of incorporating new functions at the same time as maintaining the commission's reputation for robust independence and objectivity.'
A report on the first year of best value is expected in the next few weeks and inspection is to be scaled down following criticism.
Sir Andrew added: 'We will be very candid about the first year of best value. We are prepared to learn how it can be improved.'
Dame Helena's replacement will be appointed by government ministers.