Medical staff are fearful of violence from patients
The government wants to create a "zero tolerance" environment in hospitals and clinics in an attempt to reduce the 65,000 assaults on NHS staff each year.
But those suffering from mental health problems or with life-threatening conditions will not be barred from treatment, said Mr Milburn.
Last resort
The guidelines, which will be sent to all GPs and health authorities in England from Friday, will balance the duty to provide health care with the need to protect staff.
"No one has the right to abuse, intimidate, harass or injure NHS staff and then to expect the same staff to respond with their usual care and compassion," Mr Milburn told the Community Practitioners and Health Visitors Association conference in Bournemouth on Thursday.
"The withholding of treatment from violent and abusive patients will always be a last resort, but I believe it should be an option available to managers and staff working in NHS trusts.
"This sends out a very clear message that violent and abusive behaviour will not be tolerated and decisive action will be taken to protect staff, patients and visitors."
The British Medical Association has supported the campaign but warned that the cause of abusive behaviour must be established before treatment is completely withdrawn.
Dr Peter Hawker, chairman of the BMA's consultants' committee, said drunken and loutish behaviour was the most common problem facing A&E departments around the country.
But violent behaviour could be triggered by a number of other factors including confusion as a result of a major infection, severe pain, following a stroke or by mental illness.
Dr Beverly Malone, General Secretary, Royal College of Nursing said: "Nurses will be very reluctant to stop treating a patient - but if a patient is being violent, abusive and aggressive, they can't deliver high-quality care, which is the primary issue.
"This announcement gives nurses permission to say no to violence at work.
"It makes it clear that dealing with violence isn't part of a nurse's job.
"Safeguards, such as those protecting patients with mental health problems, will be an important element of the guidelines."
Red card system
Under the new guidelines NHS trusts will each draw up their own local policies to deal with violent behaviour, but patients will normally be issued with warnings before treatment is withheld.
Two London hospitals - Bart's and the Royal London - have already introduced yellow and red card systems to warn abusive patients that treatment could be withheld.
Mike Stone, chief executive of the Patients' Association, said: "Violence, whether it be physical or abusive, towards NHS staff can never be condoned.
"However we are pleased that people with life-threatening conditions are being exempted from this rule and barring patients from treatment really must be used only as a last resort."
Mr Stone said violence often erupted when patients became frustrated by long waiting times, lack of information and a fear of the environment they found themselves in.
The guidelines have been prepared in consultation with the Mental After Care Association, mental health charity Mind, the National Schizophrenia Fellowship, the British Medical Association, public service union Unison, the Royal College of Nursing and the Royal College of General Practitioners.