On Monday, the government published a league table of hospital costs that reveals huge variations between charges for the same operation.

But the Institute of Health Services Management (IHSM) has described the figures as "welcome but lopsided".

Alan Milburn: 'Discrepancies are pretty alarming'

The statistics show that the cost of a hip replacement varies by three-fold from £1,834 to £6,494.

The cost of a cataract removal varied from £337 to £1,659. Vasectomoies start at £148 but can cost £1,000.

Overall, the cost of surgical operations in the most expensive units is 58% higher than in the least expensive.

Based on returns from all 249 NHS Trusts, the league table shows that nine out of 10 NHS Trusts are within 20% of the national average cost for surgery.

The four most expensive NHS Trusts in England for surgery are, the Walton Centre for Neurology and Neurosurgery, Liverpool; United Leeds Teaching Hospitals, Nuffield Orthopaedic, Oxford and the Royal Orthopaedic, Birmingham.

The least expensive for surgery are Moorfields Eye Hospital, London and Dorset Healthcare NHS Trust.

However, the IHSM, the professional body for health sector managers, warned that the reasons behind the cost differences needed careful study.

IHSM director Karen Caines said: "The variations in cost for the same operations around England needs to be handled thoughtfully. The reasons behind the figures - including the lowest as well as the highest costs - need careful consideration.

"As the government is discovering with its proposals for 'value added' assessment of schools, league tables need to be both fair and soundly based or they risk aggrieving good performances."

Health Minister Alan Milburn said costs used to be kept secret because the conservatives had encouraged hospitals to compete against each other for business.

He said the government had decided to publish costs in an attempt to end the culture of competition engendered by the internal market in the NHS.

Mr Milburn said there might be genuine reasons why some hospitals charged more for surgical procedures, such as differences in staffing levels.

But he added that ministers would expect hospitals that were charging significantly more than the average to cut their costs in line with government targets.

When resources were not used to best effect, patients lost out, Mr Milburn said.

'Pretty alarming'

Alan Milburn: 'Cooperation, not competition'

He said: "Some of the discrepancies are pretty alarming. The onus is now on the individual hospitals to explain why their costs are out of kilter with other hospitals in the country and to do something about it.

"We want hospitals comparing in public rather than competing in secret. That has got to be in the best interests of the public.

"I am determined that the huge extra investment the government is putting into the NHS - £21bn over the next three years - is also matched by record levels of efficiency."

NHS managers are concerned

Stephen Thornton: 'Must compare like with like'

Stephen Thornton, chief executive of the NHS Confederation, which represents NHS trusts, said hospitals welcomed the move.

It was important for health authorities and trusts to be held publicly accountable.

"But one concern we have is the tone of the minister's statement. He has talked about sending in `hit squads' of auditors.

"That doesn't sound like the language of partnership. It's not the best way for hospitals to learn from each other."

Mr Thornton said the confederation was right behind the drive to ensure all doctors were subject to an externally accredited audit of their work.

"But it's important that when this material is published we are able to compare like with like so people can take sensible decisions based on the information.

"At the moment, the biggest single cause of price variations is simply the way different hospital accountants apportion overhead costs to different operations."

Mr Milburn said further information on the quality of clinical outcomes would also be published.

'It is a red herring'

Shadow Health Secretary Ann Widdecombe criticised Mr Milburn for announcing the decision to publish hospital cost tables outside Parliament.

"Making the announcement on the Today programme is further evidence of Labour's contempt for Parliament," she said.

Miss Widdecombe claimed that publishing the tables was "a red herring that will do nothing to improve patient care" as Labour's reforms had made the internal NHS market introduced by the Tories "ineffective".

She said: "It's a fat lot of use publishing hospital costs tables if doctors aren't allowed to exercise choice in buying care for their patients."

She dismissed Mr Milburn's suggestion that publishing the costs would make hospitals more efficient.

"The differences in costs between Trusts is largely the result of different accounting procedures in different areas," she said.