Allegations that the troubled Alder Hey hospital in Liverpool sold human tissue to a French drug company for use in one of its profit-making products yesterday caused a further public outcry over the apparently cavalier attitude of the medical profession to patients' bodies.

Just days before the publication of a report on the removal and storage of hundreds of children's organs at Alder Hey without parents' knowledge, it emerged that supplies of the thymus gland, which is routinely removed during cardiac surgery to give better access to the heart, were regularly handed over to the pharmaceutical company Aventis Pasteur, in exchange for cash donations to the hospital.

The tiny glands were used in the manufacture of a drug for aplastic anaemia.

Alder Hey parents yesterday expressed their horror at the idea of money changing hands for body parts, no matter what the hospital's motivation might have been. They said they were appalled that the hospital would hand over human tissue without the explicit consent of the patients' parent or guardian.

"This brings us right back to the issue of openness and informed consent," said Ed Bradley of the support group Pity II. "Pity II is not against research. But the hospital has ignored the families and not taken them into account at all."

Had they been asked, he said, the parents would probably have agreed to use of the tissue.

Ministers, alarmed at yet another escalation of the Alder Hey crisis, moved swiftly to condemn any exchange of cash for organs. "This is yet another piece of deeply distressing news for the parents of children treated at Alder Hey," the health secretary, Alan Milburn, said. However, he took pains to point out that, according to the hospital, it happened between 1991 and 1993, then stopped because of concerns among staff that accepting donations for organs might be unethical.

"This was a particular practice which was happening in the early 90s at Alder Hey and, it seems, some other hospitals," he said. "The NHS already knows this practice of taking organs without consent is totally unacceptable to this government."

The government would issue further guidance to the NHS, he said, hinting that it would form part of their response to the Alder Hey report, which is published next Tuesday.

To the parents, the revelations are just one more betrayal by the hospital. They claim Alder Hey released damning information about the extent of its storage of organs with apparent reluctance and, in their eyes, only under pressure.

Mr Bradley pointed to one contradiction in the dates - the hospital said thymus glands were passed to Aventis Pasteur between 1991 and 1993. The company dates it between 1989 and 1995.

Ian Cohen, solicitor for the families, said they had noticed that the thymus gland - listed by Alder Hey as tissue removed from some children during heart surgery - was not among the organs returned to parents whose children later died. He said they had been asking what had happened for 15 months.

"I don't think the removal of the gland can be criticised if it improves the outcome of surgery," Mr Cohen added. "The issue then becomes one of informed consent. My understanding is that, in relation to the local ethics guidance, explicit consent is required before an organ can be passed on to a pharmaceutical company.

"We have to ask what has the company used the organ for? We have been told that it has been used for a commercial venture, albeit an anti-rejection drug. If money was paid, what has happened to that money? We want to see the records and have full disclosure for that."

Dr Mark Caswell, clinical director of pathology at Alder Hey, said the hospital had thought it was important to help the production of the drug until 1993. "But in 1993 concerns arose over the commercial transaction and the supply was stopped," he added. "The glands are still removed but are now treated in same way as an appendix. They are not sold for any commercial gain.

"Parental consent was sought for the operations but not for the actual removal of the gland. It is unclear who initiated the contract but it was a widespread practice and Alder Hey was not the only hospital to supply pharmaceutical companies.

"I don't think parents were told but if these things were happening at the present time everything would be fully disclosed to parents and they would have the full authority. The glands were used to develop a drug used in the treatment of very ill children. If parents feel something causes further distress then we regret that. In retrospect the fact that there was a financial aspect involved should have been stressed to parents."

But the revelations, the way they have emerged and the medical profession's surprise that anybody should feel concern underlines that the issue of how hospitals treat human bodies is still far from settled.

James Underwood, the vice-president of the Royal College of Pathologists, said that a very wide range of human tissue was increasingly sought by drug companies for use in the manufacture of medicines and for testing new drugs. If unwanted human tissue, the detritus of operations, were not used, he pointed out, then there would be still more recourse to animal experimentation.

"It is something that happens all the time and increasingly because pharmaceutical companies and the developers of new technologies are all increasingly seeking the help of hospitals and doctors to get access to human tissue," he said.

The Nuffield Council on Bioethics produced a report in 1995 which recommends that no payment should be made, although hospitals must be reimbursed for their administrative expenses. It also stipulates that patients should be told what their tissue will be used for and asked for properly informed consent.

In practice, patients or their guardians sign a form agreeing to the use of tissue for research but they may not always have been fully told what that may entail.

The Medical Research Council is also working on guidelines, but the latest row is likely to lead to something with the force of law behind it. Opposition spokesmen yesterday called for the government to issue guidelines of its own.

Last night Aventis Pasteur issued a statement saying that an annual donation of less than £10 per waste fragment was made to the hospital's cardiac department to contribute towards expenses such as "nurses' training"and the fitting out of accommodation for parents.

Vital role in babies

The thymus is a small piece of lymphatic tissue that is crucial to the health of a newborn baby, but is pretty much surplus to requirements in an adult.

The flat organ, situated in front of the heart immediately below the breastbone, gained its name from its resemblance in shape to a thyme leaf. It plays a critical role in setting up the immune system of the baby to help it fight off infection and grows rapidly during the months in the womb and the first years of life, but after puberty it slowly starts to shrink.

If the thymus is removed from a newborn baby, the consequences are disastrous. The immune system fails and the baby falls prey to a gradual, fatal wasting disease. But after the first years of life, the thymus appears to have served its purpose.

The organ is no longer needed by its owner, but has proved to be of value to the pharmaceutical industry: anti-thymocyte globulins - lifesaving drugs used to prevent and treat acute rejection in transplantations - are produced from human thymus fragments.