Rebels say they will continue their NHS battle
Virtually all the NHS hospitals which expressed an interest in becoming "foundation trusts" are to go ahead with their applications.
In total, 29 out of 32 hospitals named by the government in March have been "shortlisted".
They will now mount a bid to become foundation hospitals in April next year.
The controversial reform overcame a large-scale backbench revolt last week as the Health and Social Care Bill was given a second reading in the House of Commons.
It will give hospitals greater freedom from Whitehall control, with the ability to raise funds through private borrowing.
Only those hospitals judged to have "three stars" in the government's own ratings system are allowed to apply.
Three trusts, the East Cheshire NHS Trust, Frimley Park Hospital Trust and the Royal National Hospital for Rheumatic Diseases NHS Trust plan to re-apply in October 2004 rather than attempt to gain foundation status this time around.
Health Secretary Alan Milburn said: "There has been substantial interest from NHS hospitals in becoming one of the first generation of NHS foundation trusts.
"Freeing foundation trusts from day-to-day Whitehall control will encourage greater local innovation in how services are delivered.
"Where these first 29 lead I hope the rest of the NHS will follow."
Ministers say they want every NHS hospital to achieve foundation status in the next four to five years.
However, he said that applications from trusts would fail if they lost their three star status in ratings due to be published in the next couple of months.
However, opponents of the plan say that there remains a risk of a "two-tier" health system, with foundation trusts improving while conventional trusts did not.
Commons Health Select Committee chairman David Hinchliffe said that it would create a "dog eat dog" culture within the health service.