The Conservative Party is pressing ahead with its plans for a major expansion of private healthcare, promised at its party conference last week.

Shadow health secretary Dr Liam Fox has written to a number of Britain's leading healthcare insurers to ask if medical insurance premiums could be cut if the NHS guaranteed waiting times for major treatment, such as heart disease and cancer.

The Conservatives have promised to match Labour's spending on the NHS, but do not believe this will allow for expansion of the health service.

They believe more private funds will have to be found, and argue that if the NHS guarantees treatment for major conditions, insurers will be able to offer lower premiums to cover other conditions.

Dr Fox told HSJ the scheme would only be attractive if the public was convinced that the guaranteed waiting times could actually be delivered.

He added: 'It would be a way of encouraging people to take a load off the NHS, and the guaranteed waiting times could be achieved as long as we targeted our resources rather than using the scattergun approach'.

Health secretary Alan Milburn, speaking at the Institute of Healthcare Management conference in Harrogate, accused the Conservatives of 'shattering the post-war consensus on health'with its policy.

He said the Tories were determined to create a two-tier health service, with fast track care 'for those who can afford it'and poorer treatment for those who could not.

Dr Fox said the policy would not undermine the NHS, but build on it. He said he hoped for a reduction of 30 per cent in the cost of private medical insurance policies if the scheme took off.

Abbey National reportedly believes that savings of about 30 per cent could be achieved.

PPP Healthcare told HSJ that it had told Dr Fox it should be possible to reduce the cost for elderly customers 'significantly', by about 30 per cent for a person aged 70. But 'for a person aged 30, the impact would be nearer 5 per cent. '

Lack of enthusiasm for covering young people could undermine the Conservative's plans.

But Conservative health spokesman Philip Hammond told HSJ that in his area, West Surrey, 50 per cent of elective work was already carried out by the private sector, mostly through people making one-off payments for work. Leading healthcare analyst William Fitzhugh said it was generally accepted that about 40 per cent of total private revenues now came from day patient and out patient work - and the percentage was growing.

'The NHS already cannot do all the work that is asked of it. If the private sector did not do some of that work waiting lists would be longer than they are, 'he said.

This year's edition of the Fitzhugh Directory of Independent Healthcare shows the independent acute hospital sector grew by 10. 6 per cent last year to£1,540m.

The Independent Healthcare Association said talks with the Department of Health to end the 'standoff ' between the NHS and private sector were ongoing and could show fruit within weeks. The tone of the discussions was 'very good'. Chief executive Barry Hassell said hold ups were 'inevitable' given that it was the first time such an agreement had been shaped.