More hospitals are to get the chance to be freed from government control under the foundation trust scheme.
There are currently 32 foundation trusts
Ministers are opening up the group to two-star trusts, to date only top three-star hospitals could apply.
It is part of the drive to allow all trusts the opportunity to apply for foundation status by 2008 - only 32 out of 290 have made the grade so far.
But doctors' leaders said the move undermined the whole concept behind the elite status.
Foundation trusts have a range of extra powers, including the ability to raise their own funds.
Paul Miller, chairman of the British Medical Association's consultants committee, said: "This devalues the point of the policy. Foundation trusts were meant to be a cut above.
"They are going for quantity not quality."
But Health Secretary Patricia Hewitt denied the move was a lowering of standards.
"Applicants will have to demonstrate their financial and clinical viability and sustainability as well as their overall capacity and capability to take on additional freedoms and flexibilities in the same way that current foundation trusts did."
Hospitals which apply - it is currently open to acute, specialist and mental heath trusts - will still have to demonstrate to regulator Monitor they have met the necessary criteria regarding finances and business planning.
And she said the move was also motivated by a new system of ratings starting next year.
Trusts will no longer get yearly stars as the NHS moves towards "lighter-touch" ratings.
Monitor chairman William Moyes said it would still remain a "challenging task" to get the elite status.
"We will continue to operate our rigorous assessment process which ensures that NHS foundation trusts are financially viable and sustainable and well-managed. We will not lower the bar."
The government is also introducing a "financial health check" to help applicants see if their finances are in good enough order to attain foundation status.
A number of trusts have had their applications rejected or deferred because of inadequate finances.
A recent report by the Foundation Trust Network (FTN), part of the NHS Confederation, which represents health service managers, called for more support to be given to trusts to prepare for the application.
FTN director Sue Slipman said the financial health check was a "real step forward".
She added: "We welcome ministers' recognition that the net can be widened without lowering the bar, because organisations still have to pass Monitor's rigorous financial tests before they can be authorised as a foundation trust."
And Shadow Health Secretary Andrew Lansley said the government should go even further and give every hospital the chance to apply for foundation status.
"Labour¿s policy towards foundation hospitals is piecemeal and restrictive.
"Star ratings should not be the basis for foundation status. They neither reflect clinical quality nor the financial status of a hospital."