The BBC's Jon Sopel explains the pay overhaul

Health Secretary Frank Dobson says the plans are aimed at making the service more flexible and rewarding those who take on extra responsibility.

But health workers' union Unison said it was "disgusted and dismayed" at "divide and rule tactics" it called out of date.

They include plans to give health trusts a bigger say in pay levels and mean some staff on the same grade could be paid more than others.

Other proposals include plans to slim down nurses' pay structure and for all NHS staff will have their pay decided by a national independent pay review body.

Doctors, dentists and nurses have their pay levels set by the government on the recommendations of independent pay review bodies.

Under the proposals, other NHS staff, such as hospital porters and ancillary workers, will have a review body of their own.

Key points

Mr Dobson published the key proposals in a consultation document, An Agenda for Change, on Monday:

• Three national pay spines will replace the many current pay scales. These will apply to doctors and dentists, nurses and other NHS staff respectively. The government says this will provide a fairer national framework for determining pay increases;
• Responsibility-related pay "where progression up pay spines reflects the responsibilities staff take on and the competencies they acquire";
• Conditions of service will be overhauled - some "core" conditions will be laid down nationally and there will be "appropriate local flexibility for others";
• Pay based on what a person actually does rather than what their job title is. New jobs will be designed around the needs of patients;
• More health professionals to sit on the nursing pay review body. Currently the review body is headed by lay members.

'Modern NHS'

Mr Dobson said: "My vision is for a modern pay system which helps the NHS work best with multi-skilled teams that focus on patients and which pays staff fairly for what they do, rewarding them for developing new skills and taking on responsibilities.

"The current pay system is out-of-date. There is not enough incentive for staff to take on extra responsibility or develop extra skills.

"Staff on the top of their pay scales face a glass ceiling, and have little incentive to take on more responsibility."

There will be three tiers to nurses' career structures, replacing current clinical grades. The government says the proposals will enable fast progression within each tier.

It is also negotiating a new consultants' contract with the British Medical Association (BMA). It says this will "ensure rewards go to those who contribute most to the NHS".

'Treasury's fingerprints'

Reaction to the proposals has been mixed, with NHS managers giving them a warm welcome, but wanting more cash to see them through, and Unison's spokesman Bob Abberley expressing "disgust".

Mr Abberley said staff's hopes had been "dashed" by the "divide and rule" tactics.

The Royal College of Nursing was pleased with proposals for more flexibility over career progression and a decision to link pay with extra skills rather than performance.

It thinks this will help keep senior staff in the profession.

It also welcomed a degree of local flexibility on pay, but wants strong safeguards that all nurses will be treated fairly wherever they work.

The BMA called for a meeting with ministers to discuss the plans in detail.

Shadow Health Secretary Ann Widdecombe said the plans showed Labour had done a U-turn on local pay bargaining.