NHS Cambridgeshire announced that it had issued a termination notice ending its contract with Take Care Now (TCN) from 1 December.
In 2008 a GP's father died after being given 10 times the recommended dose of diamorphine by locum Dr Daniel Ubani, who was working for TCN.
It triggered a DoH investigation into out-of-hours services which is expected to conclude that GPs should have greater responsibilities in commissioning care.
Chris Banks, chief executive of NHS Cambridgeshire, said: ‘Since the tragic death of David Gray in February 2008 our healthcare governance team has been closely monitoring TCN's safety and performance.
‘We recently became dissatisfied with the progress being made and concerned about TCN's overall performance, such that on 18 September we served a formal remedial notice under the contract.
‘The Care Quality Commission then published its interim statement on 2 October in which it referred to concern about unfilled shifts. Some of this concern arose from visits to TCN bases in East Cambridgeshire and Fenland, and adjacent parts of Suffolk.
‘The following weekend our healthcare governance team followed up with an unannounced spot check and, despite the Care Quality Commission's findings the previous weekend, found further deficiencies in the shift cover provided by TCN.
‘With this additional evidence of failure to provide the contracted services we decided to issue a termination notice ending our contract for these services with effect from 1 December.'
Co-op Camdoc will replace TCN.
TCN had decided not to contest the decision to terminate the contract.
Dr Jim Kennedy, TCN medical director, said: ‘Despite many months of discussion with the PCT, we couldn't agree on a number of issues relating to the out-of-hours needs of patients in a rural community.'
A TCN statement said use of resources was the main area of disagreement. The PCT favoured a static and rigid framework that provided a predetermined medical capability to specific locations, While easy to monitor, this monitoring did not indicate the service that the patient received. It could result in an expensive resource sitting doing nothing while another resource in the area was overloaded.
Dr Kennedy added: ‘We have been working hard to find common ground with NHS Cambridgeshire on the delivery of out-of-hours services — especially in relation to our adaptable approach in the use of resources which our experience tells us delivers better patient care.'