The BBC's Niall Dickson: "Whether the improvement can be sustained is unclear"

NHS waiting list figures for November show a drop of 31,000 on the previous month.

The number of people on NHS waiting lists is now 1,162,100 - down 150,621 from the high point in April 1998.

However, the government's satisfaction at the fall has been blunted by the news that hospitals across the country are having to implement emergency measures to deal with the surge in flu cases.

Figures released by the Royal College of General Practitioners show that the flu bug sweeping the country has gathered pace, with the number of cases rising by more than 80% in a week.

The RCGP suvey found more than 97,100 people in England and Wales fell ill with the virus in the last week, compared to around 53,200 in the week before Christmas. The number of infections reached 185 cases per 100,000 people in the week ending on January 3.

Experts admitted the current outbreak of flu still has another week to run before it reaches the height of its five-week cycle.

The rise in numbers falling ill from flu is affecting all parts of the country, with GPs reporting the first subtantial number of cases in the South as the bug moves down from the North and the Midlands.

Hospitals, ambulance services and doctors in Leicestershire, Warwickshire, Staffordshire and the West Midlands are struggling to cope with the crisis, which shows no sign of relenting.

Walsall Manor Hospital has been inundated

As few as 20 intensive care beds across the whole of England were available after the weekend as numbers of seriously ill people multiplied.

Norfolk and Norwich suffered such an unexpected increase in deaths that it hired a cold storage lorry as a temporary morgue.

The Walsall Manor Hospital had to turn away emergencies for 90 minutes on Sunday, while other hospitals in the region were forced to cancel operations.

Dr Simon Walford, medical director of New Cross Hospital, Wolverhampton, said staff were working extremely long hours to try to cope with a doubling of emergency admissions.

He added that there was a lot of anger among staff and a feeling that NHS bosses had been complacent about their ability to cope.

"We have seen over recent years our flexibility and capacity reduced in the name of efficiency savings so that when this sort of thing happens instead of being able to absorb it and cope we see enormous disruption, and we see staff being asked to work hours that no ordinary person would ever dream of doing, and it is just not fair.

"Staff want to do an excellent job, but they are being asked to cut corners."

The BBC's Niall Dickson: "Health service in crisis"

Despite the latest falls in hospital waiting lists, the decreases of recent months are likely to tail off sharply as the number of flu sufferers and people affected by other winter illnesses are added to monthly figures.

Dobson defends record

Dobson: "There is little slack in the system"

Health Secretary Frank Dobson said the government had pumped £200m extra cash into the NHS this winter, and had made more intensive care beds available.

But he admitted that a flu epidemic would still make it very difficult for the system to cope.

He said: "There is very little slack in the system."

Kevin Bouquet reports on the problems in Merseyside

Mr Dobson highlighted the situation in Liverpool, where the ambulance service is ferrying about 1,000 people to hospital a day. Normally the figure is 500-600.

The Health Secretary said no contingency plan could be drawn up to cope with such an increase in demand.

"My major interest is in trying to make sure people who get ill get treated promptly and effectively," he said.

"A lot of measures were taken to try to put the NHS in as good a position to cope as possible, but if you have had anything between a 50% and 75% in the number of people turning up ill at hospital it will be very difficult, there will be delays. There is no any way round that."

Widdecombe: "I welcome any fall, but it's got to be geniune"

Tory Shadow Health Secretary Ann Widdecombe said that winter bed crisis was worsening under Labour because of the party's preoccupation with waiting lists for "purely party political reasons".

"The patients being forced to wait on trolleys for treatment in accident and emergency units will not be very impressed by Frank Dobson's boasts about waiting lists," she said.

The Royal College of General Practitioners' flu monitoring unit has said that the latest outbreak is unlikely to develop into an epidemic and that the numbers of cases are not exceptional for this time of year.