Matt Prior has been dropped from the England Test and one-day squads for the tour of New Zealand which starts in February.

The Sussex wicketkeeper, 25, has paid the price for a below-par performance in the Test series defeat in Sri Lanka last month when he was guilty of costly errors behind the stumps. Instead the selectors have called up Tim Ambrose, of Warwickshire, into both squads while Durham's Philip Mustard is part of the Test squad.

"Tim Ambrose fully deserves an opportunity at this level following impressive performances for the England performance squad in India before Christmas and for Warwickshire last season," David Graveney, the chairman of selectors, said. "Matt Prior performed well with the bat in Sri Lanka and it has been a difficult decision to leave him out of this tour. But the selectors feel that he needs to further improve his wicketkeeping in order to realise his full potential in international cricket."

Andrew Strauss was recalled into the Test squad after missing out in Sri Lanka and will join the tour party in New Zealand after playing for Northern Knights in the State Shield and Twenty20 competitions. "Andrew Strauss needed a break from international cricket in our view and he will now be keen to re-establish himself in the Test side," Graveney said. "His experience will be of benefit to the squad as a whole and his inclusion will also provide us with alternative options if required at the top of the batting order."

Michael Yardy, the Sussex batsman, has been named as captain of the England Lions squad that will compete in the Duleep Trophy in India later this month. Monty Panesar will tour India with the Lions prior to joining up with England's Test squad in New Zealand. James Tredwell, the Kent off-spinner, replaces him in the one-day squad.

Test squad to tour New Zealand: Michael Vaughan (captain), Tim Ambrose, James Anderson, Ian Bell, Stuart Broad, Paul Collingwood, Alastair Cook, Steve Harmison, Matthew Hoggard, Phil Mustard, Monty Panesar, Kevin Pietersen, Owais Shah, Ryan Sidebottom, Andrew Strauss, Graeme Swann.

One-day squad to tour New Zealand: Paul Collingwood (captain), Tim Ambrose, James Anderson, Ian Bell, Ravi Bopara, Stuart Broad, Alastair Cook, Dimitri Mascarenhas, Phil Mustard, Kevin Pietersen, Owais Shah, Ryan Sidebottom, Graeme Swann, James Tredwell, Chris Tremlett, Luke Wright.

England Lions squad to tour India: M Yardy (Sussex, capt), K Ali (Worcs), M Carberry (Hants), S Davies (Worcs), J Denly (Kent), J Hildreth (Somerset), E Joyce (Middx), G Onions (Durham), M Panesar (Northants), L Plunkett (Durham), A Rashid (Yorks), A Richardson (Middx), J Trott (Warks)