NICE will come into effect on Thursday as a special health authority.

It will offer guidance to health care professionals as to which treatments are effective for which patients.

It aims to offer national guidelines for NHS treatment to end the current health care "lottery" whereby patients in one part of the country are denied treatments available to those in others.

BBC Health Correspondent Fergus Walsh explains what NICE is about

While the government has high hopes for NICE, doctors and health managers have warned that it will not cure all the problems in the NHS overnight.

However, they broadly support the institute's aims.

NICE was first proposed in the government's White Paper The New NHS and is central to its reforms of the health service.

Its three main functions will be:

• To appraise new and existing health technologies
• To develop clinical guidelines
• To promote clinical audit and confidential inquiries

'Care based on need and need alone'

Health Secretary Frank Dobson launched the institute in London on Wednesday.

Dr Jonathan Reglar of the BMA GPs Committee offers a doctor's perspective on NICE

He said: "We promised that if you are ill or injured there will be a National Health Service there to help, and access to it will be based on need and need alone, not on where you live.

"The creation of NICE is part of keeping that promise.

"The NHS is the fairest and most efficient health care system in the world. But it could be better.

"Currently, some patients aren't getting fast and fair access to quality treatment. That can't be right. So NICE is being created to help ensure that access to quality treatment is made fairer and faster.

"For the first time in its history, the NHS has a body dedicated to ensuring that every NHS patient in the country gets fair access to quality treatment.

"NICE will give advice on the clinical and cost effectiveness of both new and existing health technologies, including medicines, diagnostic tests, and surgical procedures.

"By identifying which new developments most improve patient care, NICE will help spread good value, new treatments quickly across the NHS. It will help protect patients from out-dated and inefficient treatment.

Sir Michael Rawlins: "End to postcode prescribing"

"NICE will ensure that the latest health treatments are available equally to all patients, who will get the most modern treatment more quickly under this revolutionary approach to networking new developments in healthcare."

Professor Sir Michael Rawlins will run the institute.

He said: "Patients can expect a much more even treatment pattern across the country, much better treatment in some instances and they can also expect to see an end ot postcode prescribing."

Care restrictions

But some critics have said this means the latest health treatments could equally be denied equally to all patients.

NICE chairman Sir Michael Rawlins outlines the institute's aims

However, most doctors and health authorities have welcomed the institute, believing it will take controversial decisions on new treatments out of their hands and limit the so-called postcode lottery of care.

A spokesman for the British Medical Association said: "We are very much in favour of NICE and welcome it wholeheartedly. We think it will have a positive impact on the health service and will address the whole rationing issue."

The institute will look at rules for expensive treatments such as beta interferon

The BMA reacted furiously when the government placed restrictions on the prescription of anti-impotence drug Viagra.

Were Viagra to come onto the market today, it would be up to NICE to decide who gets it and issue guidelines on best practice for managing impotence.

The BMA spokesman said: "It remains to be seen whether the government will refer Viagra to NICE but we believe it is the right place for a decision to be made."

The NHS Confederation, which represents NHS management, said the public must be careful not to expect too much too soon.