All but 10 of the 66 applications for the first-wave of trusts have been approved, although consultants Coopers and Lybrand, which appraised all the applications, say only 14 are financially watertight.

Managers whose applications were rejected by health secretary William Waldegrave angrily criticised the selection process for failing to give regular feedback, and dismissed Coopers' role as 'simplistic in the extreme'.

Labour would bring trusts back under health authority control if elected to power, it reveals in a policy document, A Fresh Start for Health.

Performance agreements would replace contracts, and compulsory competitive tendering would end. Shadow health secretary Robin Cook said he expected contractors would lose interest in the NHS after a Labour government introduced a minimum wage.

Shortages of flu vaccine have prompted the Department of Health to underwrite the cost of an extra 1 million doses. Manufacturers have produced 12 per cent more than last year. A DoH spokesperson said: 'Doctors who were on the ball, aware of last year's epidemic, ordered early, and there is evidence that perhaps some ordered too much while others have not had enough.'

Waiting lists are set to top 1 million as health authorities close beds and restrict elective surgery during the winter. Figures showed 912,800 people were waiting for operations in March.

The British Medical Association blamed a 'chronic cash shortage' for the pressures, and predicted lists would continue to rise in future years.

Former shadow health minister Frank Dobson has blamed the new prime minister, John Major, for NHS underfunding. He told a rally against cuts at Great Ormond Street Hospital that Mr Major had refused the service sufficient funds while chief secretary to the Treasury.