Labour argued that this created a two-tier system which meant fundholding patients often jumped hospital waiting lists because they had ready cash.

Primary care groups (PCGs) come into being in England on Thursday, but there are four stages before they are fully fledged.

Slightly different schemes on the same theme will be introduced in Scotland, Northern Ireland and Wales. The government hopes that moves towards uniform standards of care will be achieved by scrapping the GP fundholding scheme and replacing it with a system of 481 PCGs.

Under this system, groups of about 50 GPs will decide together, and in collaboration with other health and social services professionals chosen by the government, how NHS budgets should be spent in their area.

The PCGs will be expected to abide by the national service frameworks, and by district-wide guidance laid down by the local health authority.

Some doctors are concerned about the impact of the reforms, believing they could mean a big increase in paperwork for doctors and lead to them being blamed for funding decisions which are out of their hands.

But Dr Simon Fradd, deputy chairman of the British Medical Association's GP committee, said: "The introduction of PCGs is unlikely to have any great effect at all.

"Having pared back NHS resources to the bone, there is not now sufficient total capacity in terms of hospital beds to deal with even a predictable increase in demand, such as an outbreak of flu."

Dr Fradd hoped that the involvement of public representatives in PCG meetings might, however, increase pressure on the government to make more resources available for the NHS.

He said: "Doctors have been wary about the involvement of lay people in PCGs, but I think it might be tremendously empowering.

"They might echo what health service practitioners have been saying all along - that if you want a quality service it is no good using scientific developments as an excuse to cut the number of hospital beds.