The NHS computer system has been hit by delays and cost over-runs
The government is to scale back its £12bn NHS IT system in what the Tories are calling a "massive U-turn".
Chancellor Alistair Darling said he would be delaying parts of the scheme in Wednesday's pre-Budget Report as it was "not essential to the front line".
The move may save hundreds of millions but Mr Darling admitted it was only a fraction of total spending cuts needed.
The Tories and Lib Dems have been calling for the IT system, which has been hit by costly delays, to be axed.
Mr Darling told BBC One's Andrew Marr show he was determined to halve Britain's budget deficit over the next four years and as a result public spending would be "a lot tighter than it was in the past".
He stressed that the pre-Budget report was not a spending review, but added: "I do think it is necessary for me to indicate areas where we are going to cut spending or where we're not going to spend as much as we were.
It has held back the development of IT at a local level, cost billions and is running years behind schedule
Norman Lamb MP Liberal Democrats
"For example, the NHS had a quite expensive IT system that, frankly, isn't essential to the front line.
"It's something I think we don't need to go ahead with just now."
He said the full picture of cuts would not emerge until "the first half of next year at some point" - a reference to the comprehensive spending review, which the government has delayed until after an election.
Treasury officials have stressed that only part of the NHS IT programme is facing the axe, and the whole project will not be scrapped.
WHAT IS THE IT PROGRAMME?
The vision is for patients' records to be electronically available to any GP or hospital in England, thereby replacing local NHS computer systems
Other services include electronic prescriptions, an e-mail and directory service for all NHS staff, computer accessible X-rays and a facility for patients to book outpatient appointments online
It is the largest single IT investment in UK - costs are expected to hit £12.4bn over 10 years to 2013-14
But the Conservatives said Mr Darling's words represented a "massive U-turn".
Shadow Health Secretary Andrew Lansley said it was "another government IT procurement disaster".
"After seven years Labour have finally acknowledged what we've said for years, that the procurement for NHS IT was costing billions and not delivering," he said.
The electronic patient record system, which is thought to have cost about £12bn so far, was commissioned in 2002 by then prime minister Tony Blair, and was meant to be completed by 2010.
It was supposed to computerise medical records in a central database and link up more than 30,000 GPs to nearly 300 hospitals.
Mr Lansley told BBC One's Politics Show the Tories would scrap the "enormous centralised IT system" and instead give hospitals "the opportunity to buy IT systems" that could transfer images, patient records and prescriptions electronically.
It comes as the Conservatives called for a moratorium on all government computer projects, ahead of the publication of the government's five-year IT strategy later this week.
They say Labour has spent £100bn on IT since 1997 and contracts worth another £70bn are due to be renewed or commissioned in the next two years.
The Liberal Democrats said the NHS programme had been "flawed from the start".
The party's health spokesman, Norman Lamb, said: "It has held back the development of IT at a local level, cost billions and is running years behind schedule."
BMA spokesman Dr Grant Ingrams says the IT system is an "essential tool" for doctors
But Dr Grant Ingrams, from the British Medical Association, said the system currently scheduled to come into effect would result in the NHS saving money.
"It's an essential tool for clinicians, for doctors and other staff to be able to treat patients," he said.
"The NHS pays out a third of a billion pounds a year on mistakes; a lot of that could be put right if the IT was in place."
Tony Collins, executive editor of Computer Weekly magazine, said the government should scrap central contracts.
"What they've done is to set up these very large, central contracts which have an intermediary who delivers the systems to the trusts," he said.
"They could save money by cancelling those central contracts and giving trusts the ability to choose what systems they want."
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