Halving the size of the Department of Health and scrapping strategic health authorities are among Liberal Democrat health spokesman Norman Lamb’s proposals for cutting public spending.

He will also urge the Liberal Democrat party conference in Bournemouth to demand that quango chiefs’ pay be capped at that of the prime minister.

Mr Lamb will note that health quangos cost £1.2bn a year and employ 25,000 people, and that 24 bosses are paid more than prime minister Gordon Brown.

He has pledged to abolish many of the quangos - quasi non-governmental organisations - and cut by a fifth the amount spent on the rest.

He is underlining party leader Nick Clegg’s commitment to “bold and even savage” cuts in government spending to bring down the ballooning public spending deficit.