Ministers plan to ditch the firm carrying out "fitness for work" tests on disabled benefit claimants, according to leaked government papers.
French-run Atos has been criticised for its handling of work capability assessments, used to gauge eligibility for Employment and Support Allowance (ESA) and Incapacity Benefit.
Ministers last year said they were commissioning other firms to add "capacity" to the assessment system. According to a Department for Work and Pensions (DWP) financial review seen by a London-based newspaper, the move will enable "these providers to take over the whole contract" from Atos when its £500 million deal ends in 2015.
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The restricted 80-page document states: "The department is working with Her Majesty's Treasury and Cabinet office colleagues to seek additional (health assessment) providers to offer further capacity in the short-term and for these providers to then take over the whole contract."
An Atos spokeswoman said: "We recognise that many people have strong feelings about work capability assessments. We are committed to working with the department to help them meet their needs and the needs of claimants."
Disability minister Mike Penning last week told MPs the scale of appeals - around 600,000 since its introduction - meant there was "real concern" about the work being carried out.
A DWP spokeswoman said: "Atos was appointed sole provider for work capability assessments by the previous government."