But reaction from health workers and opposition MPs has been mixed, with health managers warning the increases could impact on other areas of the NHS budget.

Newly qualified nurses working outside London have been awarded a 12% pay increase.

This means their pay will rise from April 1 from £12,855 a year to £14,397. In London, newly qualified Grade D nurses will earn more than £17,000 as the weighting for living in the capital will rise by 15.4%.

Fergus Walsh: "Experienced nurses want a bigger rise"

Seventy thousand nurses at the top of the Grade D scale will receive an 8.2% increase, lifting their salary to a maximum of £15,905 from £14,705. Other nurses will receive increases of 4.7%.

General practitioners, hospital doctors and dentists are to receive 3.5% pay increase.

The pay increases will be paid in full from April 1. However, the British Medical Association has condemned the government's refusal to agree a pay review body recommendation to make an extra £50m a year fund available from April 2000 to recognise the hard work of hospital consultants.

Health Secretary Frank Dobson said: "Today's announcement is the best pay award to nurses and professions alllied to medicine in real terms in the last ten years."

Mr Dobson said the pay settlement should help to boost recruitment and retention of nurses, midwives, health visitors and other health workers.

"Health authorities and Trusts can now use these opportunities to support a modern approach to recruiting, retaining and motivating key staff."

Mr Dobson said £100m would be made available from the NHS modernisation fund to finance pay rises.

He also guaranteed that plans to modernise the health service would not be jeopardised by the pay settlement.

Mr Dobson said the next step was to reform the pay system to give nurses and other NHS workers more chance to boost their pay through career development.

He said a more flexible approach was also needed such as the development of family friendly employment strategies, and life long learning programmes.

"A modern NHS requires a modern pay system. We need a pay system that helps staff to give their best for patients, working in new ways and breaking down traditional barriers," Mr Dobson said.

"It will not be a quick fix. It will take time. But we must make early progress."

Big questions

Christine Hancock, general secretary of the Royal College of Nursing, welcomed the rises for junior nurses, but said the increases for experienced nurses was not enough.

BMA leaders warned the failure to give doctors a significant pay increase could lead to deepening morale problems in the profession.

Ann Widdecombe

Shadow health secretary Ann Widdecombe said the pay award threw up two very big questions.

"Some nurses will have benefitted hugely from this award, but they only account for about 6.6% of nurses," she said.

"We have to see what this award is going to do for retention at the upper levels.

"Secondly, and more importantly, we need to know whether these awards are going to be met without hospital trusts having to dip into money made available for other clinical services."

Liberal Democrats unimpressed

Simon Hughes claimed nurses needed a bigger pay rise

Liberal Democrat health spokesman Simon Hughes said the government had not pumped enough money into the NHS to make up for staging of pay awards in previous years. He said the average pay award should have been at least 5%.

"It is certainly better than last year, and it was not staged, I accept that," he said.

"The trouble is we have a bigger crisis than a year ago, and we need drastic measures.

"I think it would have given a huge fillip to morale if they had said 'look the pay review body people recommended 4.7%, we are going to give you 5%, it means you are going to have caught up over the last few years'.

"They could also have put something on the table to invite back those people who have left the NHS, who are still qualified and could come back and fill the 9,000 empty places. That is the trick they have really missed, and sadly I think we will still have empty places a year from now."

NHS managers concerned

The NHS Confederation, which represents health authorities and trusts, warned that the pay increases would leave little room for improvement of local services.

Confederation chief executive Stephen Thornton said: "We welcome the significant pay award for nurses and in particular the pay boost for newly qualified staff.

"However, our concern is about affordability. Health authorities and trusts will not just have these awards to contend with but will also have to meet the cost of a whole range of service pressures, including the cost of screening blood products for new variant CJD, the inevitable overspending on primary care prescribing and the increased costs of legal action.

"Health authorities and trusts will also have to meet very tough efficiency targets if all of this is to be paid for. Many member organisations are telling us these are unrealistic."

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