The government should admit rationing is inevitable and back efforts to make the process fairer and more transparent, the King's Fund has said.

Responding to two government consultations, on the proposed appraisal process by the National Institute for Clinical Excellence, and on anti- impotence drug Viagra, the charity argues that NICE will 'take decisions that may effectively ration or restrict access to healthcare in the NHS'.

NICE, which starts work next month, should set a framework for tackling rationing decisions which can then be issued for public consultation.

The King's Fund says where there is doubt over whether a treatment is suitable for NHS funding, the health secretary 'should have a clear and formal role in reviewing the conclusion of the appraisal committee'.

'We believe that it is the job of a political leader, not the civil service or a committee, to reflect, justify, and apply social values in the allocation of public money for public good,' the response says.

The King's Fund also suggests that the health secretary's decisions should be subject to public consultation, and that there should be a clear mechanism for challenging NICE decisions.

'The stakes are high and the arguments of many stakeholders will be impassioned.

'For these reasons it is of crucial importance that the appraisal process is not only fair, but also seen to be fair.'

The fund welcomes the government's openness on NHS prescribing of Viagra but says it is wrong to use diagnostic criteria to ration the drug.