Martin Sime, chief executive of the Scottish Council For Voluntary Organisations (SCVO), said ministers had "lost sight of the plot" with the Public Bodies (Joint Working) Bill, which aims to improve social care.
The head of the umbrella group for the third sector said it would perpetuate bad decisions on care. Mr Sime said the proposed legislation had moved away from its original purpose of improving services by merging the efforts of the NHS and social work.
He claimed that instead councils and health bodies had become locked in a battle to see who retains most ground, and that other voices are being excluded.
The SCVO argues that the Bill should recognise the importance of the contribution of charities to health and social care through food services, community hubs, carers centres, transport and other services.
Mr Sime also attacked councils and health chiefs for lobbying to deny voting rights to charities taking part in new partnership boards running integrated services.
He said the third sector has been told they cannot vote because boards are not elected and service-users cannot decide how money is spent: a position he describes as "disrespectful" and suggests there is another reason behind this.
He said: "When health and local government have an equal amount of seats, that would give a balance of power to charities or ordinary people and that would never do, so they have to invent reasons for us not to be there.
"The reality will be a removal of power from people and communities, not a shift in power and resources to them. They have lost sight of the plot."
Mr Sime said the chief effect would be to bring together 14 health boards and 32 councils to create 32 new public bodies.
He said that the Bill ignores policies in self-directed support, which mark a fundamental shift of power towards individuals making decisions about their care. He added: "This Bill is entirely silent about that. This legislation will achieve nothing that couldn't have been done without a change to the law. There must be better ways of sending a message to people.
"This is about moving the institutional furniture. But the old-fashioned way of public authorities deciding what is best for you is not going to stand the test of time."
SCVO argues that excluding the voluntary sector excludes the voices of many people who use charity services, such as people with disabilities, carers and other service users.
A spokesman for Cosla said: "We agree with our colleagues from SCVO that to improve the well-being of our population there needs to be effective partnership between local government, the NHS and the third and independent sectors.
"We're absolutely committed to that, as evidenced by the creation of a change fund for older people's care, which required all four sectors to endorse local commissioning strategies and, when Health and Social Care Partnerships are formally established, we would want a cross-sector approach to commissioning to continue."
A Government spokesman said: "By focussing on bringing together service planning across health and social care, and integrating budgets to make best use of public resources, integration of health and social care will improve outcomes for people."