The government's announcement of extra payments for nurses in London and South East England has been criticised as 'divisive' amid rumours that it could result in a lower pay award for nurses nationally.

In a move first outlined by prime minister Tony Blair at a chief nursing officers' conference last week, the government is to introduce 'an extra pay supplement for qualified nurses' in the capital and the South East.

It would be worth 'a minimum of£600, over and above London weighting' for nurses, with senior nurses receiving£1,000. In areas outside London 'such as Bristol, Swindon, Oxford and Berkshire' nurses would receive 'on average in the region of£500'. Mr Blair said: 'The nurse shortages are not uniform across the country. They are most severe where there is full or near-full employment and the cost of living is highest.'

NHS Confederation human resources policy director Andrew Foster said the payments should help trusts addressing nursing recruitment and retention problems, but added that they also faced these problems 'among other groups of staff '.

'The confederation is concerned that these payments will be seen as divisive by NHS staff, ' he warned.

Royal College of Nursing general secretary Christine Hancock welcomed 'this initial step forward', but had 'some concerns' over whether the payments 'would simply shift the problem of nurse shortages from area to area'.

'What we do need to see is good basic pay for all nurses, ' she said.

Other unions scorned the plan.

Unison national secretary for health Paul Marks attacked it as 'a totally discriminatory pay award which will hit the morale of health workers across the country'. The award was limited to qualified staff, while 'even among these' some would receive 'twice as much as others'.

MSF union's head of health, Roger Kline, said high housing costs in the South East were 'even worse for many other staff, such as medical laboratory technicians', not covered by the announcement.

Mr Blair's announcement on Friday was predicted by a senior source, who suggested that the nursing staff pay review body might consider 'a lower award' overall if the government moved quickly on the 'market forces payments' promised in the NHS plan.

A pay review body member would not comment on this but had 'no doubt' the review body would 'look at' the payments.

NHS Confederation policy manager Alistair Henderson said he 'would imagine' the timing of the announcement was 'in part to fit in with the review body's deliberations. I don't think that was a coincidence.'

A Unison spokesperson said: 'I can't believe the government could be that cynical and manipulative.'

Mr Blair also announced the establishment of a national nursing bank, NHS Professionals, which would allow staff to work flexible hours while receiving holiday pay and NHS pension rights.

It will be piloted in 15 health authority areas.

Tied hands: 'Constraints' at the pay review body A former pay review body member has told how the review body is 'constrained' by ministers.

Institute of Directors head of policy Ruth Lea, a member of the nursing review body from 1994-98, told HSJ: 'You're so constrained. You could see shortages emerging in certain specialties. At the end of the day, ministers - whether [Conservative] Gerry Malone or Alan Milburn - kicked off by telling you you weren't meant to give more than inflation.'

Ms Lea said: 'I believe in market forces. At the IoD we believe in paying people to recruit, retain and motivate.'

But the review body was 'restricted by the Budget' and the market was 'not operating'.