The government has spelt out its controversial plans to create new "super hospitals".
Guy's and St Thomas' Hospital has applied for foundation status
The Health and Social Care Bill outlines the freedoms so-called foundation trusts can expect to enjoy.
Ministers announced plans to free top-rated trusts in England from central government control last year. They believe the move will help to improve standards across the NHS.
Health Secretary Alan Milburn has said every hospital will be able to apply to become foundation trusts within five years.
However, the Bill is expected to have a rough passage through parliament, not least because a sizeable proportion of the Labour Party opposes the policy.
In December, more than 100 MPs - most of them Labour - signed a parliamentary petition warning the proposals would lead to the creation of a "two-tier" health service.
In January, 45 Labour backbenchers defied ministers to vote against the proposals after a day long Commons debate on the issue.
Opposition parties have also criticised the plans saying they are muddled and have not been thought through.
Every NHS hospital will have the opportunity of becoming a foundation trust over a four to five year period
Health Secretary Alan Milburn
Former Health Secretary Frank Dobson is among leading critics who say the plans are "elitist" and follow a "Tory consensus".
Under the government's plans, foundation trusts will be allowed to set their own clinical and financial priorities.
Land sale proceeds
For the first time, they will be able to raise money on the open market and keep any proceeds they raise from the sale of land, for instance. They are also expected to be allowed to set separate pay and conditions for staff.
The hospitals will operate on a not-for-profit basis and will be run in part by a board comprising members of the local community. They will be established as "Public Benefit Corporations".
At least 30 trusts have already applied for foundation status. The Department of Health is expected to decide on successful applicants later this year. The first foundation trusts are scheduled to come into effect in 2004. They are based on models which currently operate in Spain and Sweden.
The Bill also includes proposals to create a new Commission for Healthcare Audit and Inspection, to inspect both the NHS and private healthcare sector, and a new Commission for Social Care Inspection.
Mr Milburn said the new trusts would be strictly not-for-profit.
"These NHS Foundation Trusts will be not-for-profit organisations, wholly part of the NHS, subjected to NHS standards and inspections, but no longer directed from Whitehall."
He added: "Every NHS hospital will have the opportunity of becoming a foundation trust over a four to five year period. It will help to construct the modern, democratic 21st Century NHS our nation needs."
Shadow Health Secretary Dr Liam Fox backed plans to create foundation trusts. But he added: "It would be a wasted opportunity if the power struggle between Alan Milburn and Gordon Brown resulted in the watering down of this concept."
The Liberal Democrats pledged to fight the Bill. Health spokesman Dr Evan Harris said: "Foundation hospitals are not the right way to give real power to local people over their NHS."
The NHS Confederation, which represents health service managers, welcomed the proposals.
Gill Morgan, its chief executive, said: "We believe foundations could be an important first step towards a more decentralised NHS.
However, Rosey Foster, acting chief executive of the Institute of Healthcare Management, added: "We need reassurance that the NHS as a whole and patients everywhere, not just in the 'elite' hospitals, will benefit."
Macmillan Cancer Relief expressed concern that foundation trusts would be able to opt-out of NHS targets.
Peter Cardy, its chief executive, said: "Alan Milburn needs to clarify that every hospital and every person living with cancer will be covered by the NHS cancer targets and standards, including the NHS Cancer Plan."
Bill Morris, general secretary of the Transport and General Workers' Union,
said foundation hospitals would be "ushering in a two-tier health service".
"If this Bill goes through, access to excellent healthcare will depend on the
size of your wallet or where you live - not on the basis of your need," he