Health Secretary Patricia Hewitt has apologised to junior doctors over the continuing recruitment crisis.
Junior doctors have taken to the streets over the problems
A new online system for selecting doctors for training posts has been heavily criticised for failing to select the best candidates.
Ms Hewitt said the scheme had caused "terrible anxiety" for junior doctors which shouldn't have happened.
The government has now offered doctors one interview but the British Medical Association said it was "unacceptable".
And Bernard Ribero, president of the Royal College of Surgeons, warned they could pull out of negotations, and start to make appointments independently.
He said: "I will not see a generation of highly qualified, experienced and committed surgical trainees exposed to the vagaries of an untested and clearly flawed system."
Speaking on BBC Radio 4's Today programme, Ms Hewitt said she regretted the failures in implementation of the Modernising Medical Careers (MMC) reforms.
"There's been terrible anxiety caused which shouldn't have happened to junior doctors.
"The new system of MMC I think everybody supports but the actual implementation in this first year of transition was nowhere near what it should have been."
But she said she didn't accept that there were faults with the system.
"We are still in the process of ensuring that every junior doctor gets an interview and those interviews have already started - but they haven't finished - for the job of their first choice.
"The shortlisting process didn't work. We are in the process of sorting it out and we are now guaranteeing every junior doctor an interview for the speciality of their choice."
The head of MMC, Professor Alan Crockard, resigned at the weekend over the chaos caused by the introduction of the Medical Training Application Service.
It was designed to speed up the process for placing doctors in specialist jobs, but a catalogue of complaints have emerged.
Doctors say the forms are badly worded, do not ask pertinent questions, do not allow them to set out relevant qualifications and experience, and have no facility for attaching a CV.
The result, they say, is that the best candidates are not being selected for the right jobs and has left thousands without any interview at all.
Junior doctors abandoned talks with the government's review group, saying it was "unacceptable" for more than 11,000 doctors who offered two or more interviews to now settle for just one.
Dr Tom Dolphin, deputy chairman of the British Medical Association's Junior Doctors Committee, said: "It's long overdue, but at last the government is acknowledging the huge anxiety that this shambles of a system has created.
"However, an apology isn't enough. We need a way out of this mess for the 32,000 junior doctors who currently don't know if they have posts to go to in August."
'Fewer jobs available'
A BMA analysis has suggested that 18,518 specialist training posts are available under the new system - not 22,000-23,000 indicated by the government.
It is warning that large numbers of doctors will have no training post in August.
Dr Jo Hilborne, chairman of the BMA Junior Doctors Committee, said: "Not only has the government failed to design a fair recruitment process, they've also misled everyone on the number of jobs available.
"Even if the application system improves, thousands of doctors are going to find themselves without a training post in August.
"We really don't want highly qualified medical staff to be forced to leave the NHS, but if they can't complete their training in this country, it could be their only option."