A new knee surgery method could cut hospital stays by three quarters to two days, its makers claim.
The NexGen MIS Mini-Incision knee operation uses an incision half the length of ones currently used in a standard operation.
Zimmer, the company which developed the operation, said it allows patients to recover more quickly.
The demand for knee replacements is growing. The number of operations rose by 15% last year.
This is due to an ageing population and an increase in obesity related conditions.
It is estimated knee replacements now cost the NHS more each year than total hip replacements.
Each knee replacement costs around £5,500, 28% more than the estimated cost of a total hip replacement.
Knee replacements could cost the NHS almost £1bn per year by 2010 if rates continue to rise at 15% a year.
Zimmer claims the NexGen procedure could help the NHS save more than £250m of this cost because patients would, on average, need to stay in hospital for only two days, compared to the usual eight.
The NexGen procedure inserts knee implants through a 10 to 12cm cut, rather than the 20 to 30cm cut used in standard knee replacement procedures.
This means less cutting of the thigh muscles than in a standard knee replacement procedure, so patients should be able return to daily life activities sooner.
The company has also developed a minimally invasive hip replacement which it claims allows a patient to go home the day after the patient has their operation.
The operation is currently available privately in seven NHS hospitals in the UK. It is hoped to extend the number to 40 by the end of 2004.
Mr Nick London, consultant surgeon at Harrogate District Hospital, and one of those carrying out the new procedure, said: "Although it is still early days and full evaluation is required, this procedure is already having a major impact on the hospital stay of patients with many routinely leaving hospital after as little as three or four days with an ultimate goal of one to three days.
"Although only a limited number of surgeons are performing the procedure at present, the procedure is expected to be available nationwide by the end of 2004 and could benefit 70% to 80% of people that need knee replacements."
Jane Tadman, of the Arthritis Research Campaign, said:" As the UK population ages and becomes more obese, so does the number of people with osteoarthritis of the knee, which is why better, more effective treatment and more efficient replacement surgery is so important.
"New, less invasive surgical techniques are being developed all the time, which is very encouraging news for patients."