The NHS is to recruit hundreds of senior and middle managers as counter-fraud specialists for a £3m network of 'fraudbusting teams'.

The NHS Counterfraud Operational Service, due to be launched yesterday by health minister John Denham, will create a team of five 'accredited professional counter-fraud specialists' in each region.

Recruitment for a 16-strong national team is likely to precede the search for up to 600 'reasonably senior' managers to work on local teams.

Every health authority and trust will have a full-time member of staff dedicated to rooting out financial malpractice.

But Barry Elliott, finance director of Bart's and the Royal London trust, and chair-elect of the Healthcare Financial Management Association, said such a large initiative was likely to mean 'unnecessary duplication' at trust and HA level.

'There is a real danger here that they are using a sledgehammer to crack a nut - and investing£3m at a time when the NHS is stretched for resources to do so,' he said.

Mr Elliott welcomed the government's attempt to tackle 'the fairly significant problems of fraud in primary care' and its promise to slash prescription charge evasion - currently estimated to cost£150m each year - by April 2002.

But he made a clear distinction between the opportunities for fraud among independent contractors free from corporate governance and 'tightly controlled health bodies'.

Mr Elliott said the acute sector already had a 'good tradition of internal and external audit' and called for clarification on how new teams would work with existing internal auditors.'We have pretty rigorous systems and internal checks that limit the scope for fraud. If they are looking to find a huge layer of undetected fraud, I don't believe they will find it.'

Institute of Health Services Management chair John Brunt, chief executive of Bolton Hospitals trust, gave a broad welcome to the announcement. But he said there was 'a need for further analysis' of the extent of the fraud in trusts.

The Department of Health blamed current systems for the lack of that data. 'The systems aren't really in place (in acute care) because fraud comes in so many areas. This is why we want to make it one person's responsibility in each body.'

Fraudbusters will receive eight weeks' training covering issues such as legal constraints on surveillance, definitions of fraud, interview techniques and search methods. Regional teams will include at least one member with NHS counter-fraud experience.

The DoH said while some staff would come from within the NHS 'a lot' will be new, recruited from similar jobs in other sectors.