An amendment to the Health Bill that would have abolished the foundation trust private patient cap has been withdrawn.

The cap limits the proportion of income a foundation trust can earn from private patients to the level it earned in 2002-03. The Foundation Trust Network wants it to be lifted or amended.

Last month Baroness Meacher, chair of the East London foundation trust, tabled an amendment to the Health Bill on behalf of the network to replace the cap with a requirement for foundations to prove that their private income benefits NHS patients.

Responding to the amendment last week, government whip Baroness Thornton said: “We would like a broader debate about the longer term direction and about how to strike the best possible balance between protecting services for NHS patients [while] creating maximum flexibility for NHS providers.”

But the government had “significant concerns” about the proposed amendment, she said, as it could see foundations earn half their income from private patients, which could jeopardise the quality of services and functions for NHS patients.

The private cap is subject to a judicial review by union Unison, which challenges regulator Monitor’s policy of ignoring indirectly earned private income in the calculation.