Paul Farmer, chief executive of the mental health charity Mind, has resigned as the charity representative on the government review panel for the Work Capability Assessment.
Farmer claimed the programme, which assesses whether incapacity benefit claimants are fit to work, was damaging to the clients Mind exists to serve and that ministers had failed to address concerns.
He said his position was no longer tenable.
The government had employed Farmer as the sole charity representative on a four-member panel that was designed to improve the programme and listen to criticisms.
Writing on his blog, Farmer said: "Ten of thousands of people are being reassessed using a test which is still not fit for purpose.
"The time has come to call a halt in the reassessment process until real changes are made. It’s damaging people’s lives. It’s costing the taxpayer a fortune. And it certainly isn’t fulfilling its purpose of supporting people with mental health problems on their journey back to work."
He added that more than 50 per cent of people being reassessed were appealing against the decision and half of those appeals were being upheld, which meant "as many as one in four tests are wrong".
He called on the Department for Work and Pensions to halt the reforms until significant changes have been made.
The employment minister, Chris Grayling, said in a statement: "This is a debate about whether we leave people on benefits for the rest of their lives or find a way to help them back into the workplace.
"I’m really sorry the charities are taking this approach but I’m absolutely of the view we’re doing the right thing."
A DWP spokesman said it was seeking a replacement for Farmer.