An early-warning system to deal with all clinical mistakes in the NHS will be set up by the end of the year.

Trusts and primary care groups will have to report all failures, errors and near-misses to an independent body, and staff will be encouraged to use a confidential service to raise concerns.

Hospitals will have to meet four targets for cutting unnecessary deaths and injuries, focusing on spinal injections, childbirth and gynaecological treatment, prescribing errors and suicides in hospital by patients with mental illness.

Chief medical officer Professor Liam Donaldson responded on Monday to a year-long investigation of NHS 'adverse events' by a group of experts in risk management, including the chief inspector of air accidents and consultants to the internal inquiry into the Paddington rail crash.

He said the NHS had failed to learn the lessons of past mistakes. 'We have a database of 15,000 cases held by the NHS Litigation Authority.

'No-one in the past has bothered to look at that to see if there are any common themes.'

Professor Donaldson said that the scheme could save some of the£2bn spent every year keeping patients harmed by their treatment in hospital when they shou ld have been able to go home.

An organisation with a memory: report of an expert group on learning from adverse events in the NHS.