Nurses and doctors are expected to be given above-inflation pay rises when the annual public sector pay settlement is announced on Monday.

It is thought ministers have accepted the independent pay review bodies' recommended "inflation-busting" rises for the NHS.

Ministers are hoping the rises will help solve health service recruitment problems - in the face of mounting criticism for struggling to cope with demand.

On Sunday, Prime Minister Tony Blair admitted the service was underfunded, but promised more money and modernisation over the next few years.

NHS staff including nurses, midwives and physiotherapists are expected to be offered 3.3% extra from April, with some staff getting more. Doctors are expected to get slightly more than 3%.

Mr Blair has signalled that nurses at the top of their profession would receive bigger increases of about 3.6%, or £1,000 a year.

It is thought this is to iron out anomalies in the pay scale, after newly-qualified nurses received a 12% boost last year.

Staff such as ambulance workers and porters, who are not covered by the pay review bodies, are expected to be offered a similar 3.3% as part of a three-year deal.

However, the pay rises have already caused controversy because they will come not from new money, but from cash already allocated to health authorities.

This could lead to funding being taking away from other areas.

The NHS Confederation, which represents health authorites, said it would be able to afford pay rises of up to 3.5% - but only just.