Unions threaten action. . .Valuing lower-paid workers. . .Guy's chief wants to compete with M&S. . .Ministers keen to loosen purchasers'purse strings. . .BMA anger at Major

Trust chief executives have met trade unions in a bid to head off industrial action after 900 redundancies were announced in London and Bradford.Union leaders made clear they blamed the internal market - not trusts - as pressure mounts to cut costs.

Trusts should value their lower-paid workers, health secretary William Waldegrave told the first meeting of the NHS Trust Federation.But his statement is not being interpreted as a warning to avoid redundancies.

Trust chairs say working practices may still need to change.

Guy's Hospital trust has instigated a review of its 250 clinical services as part of its plan to cut 600 jobs because of internal-market pressures.The services will be judged on their quality, cost-effectiveness and contribution to teaching and research.Chief executive Peter Griffiths said he aimed to make staff the highest paid in the NHS, and hoped in five years the trust would compete with Marks and Spencer in offering attractive employment conditions.

Ministers are keen to loosen controls on purchasers in the internal market so that the government can demonstrate its reforms lead to health gains.East Anglian regional general manager Alasdair Liddell said: 'I think over the next couple of years there will be a very considerable loosening up of the whole system'.But he added that purchasers would never have 'carte blanche', as that would lead to 'chaos'.

Politicians are exploiting the internal market reforms to ensure managers take the blame for continued underfunding, the British Medical Association has claimed.The BMA said it was 'surprised'and 'incensed' at prime minister John Major's refusal to meet it to discuss a catalogue of complaints it had collected in the first few weeks of the reforms.