In some areas there are too many hospitals providing the same, or similar services, which isn't value for money," a Department of Health spokesman said.

It will be up to local NHS managers to make any cuts. They could switch acute care, such as casualty wards, to larger "super" hospitals.

The government wants more patients to be treated in their homes or by their local doctors. Ministers say people prefer not to go to hospital for treatment.

Acting NHS Chief Executive Ian Carruthers said in June all district general hospitals face major change after the NHS deficit hit 512 million pounds.

Campaign group Health Emergency said patients will not benefit.

"This is all cash-driven," said Geoff Martin, the group's head of campaigns. "It's not about improving quality and access to care for patients."

Health union Unison said the government's NHS reform was moving too quickly and had damaged staff morale.

"The government needs to stop and think," a Unison spokeswoman said. "Those services are not available in the community yet."

NEW HOSPITALS

Ministers came under fire over plans to build new hospitals using private sector money.

Health Minister Andy Burnham said six hospitals will be built under the private finance initiative, where private companies build and run hospitals and lease them to the state.

"Each scheme has been rigorously checked to make sure that it offers value for money," he said in a statement.

The Conservative Party said the government had scaled back its hospital building programme.

"The government is engaged in a knee-jerk response to the financial crisis it created, permitting staff to be sacked, training places to be cut, and building projects to be scaled back," said Shadow Health Secretary Andrew Lansley.

Unison said PFI was discredited, while Health Emergency said the hospitals would be "colossally more expensive" than public sector projects.

Prime Minister Tony Blair has boosted health spending as part of reforms he says are needed to bring the NHS into the 21st century.

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