The government has said it is cutting its swine flu vaccine deal with GlaxoSmithKline in a move that will see it pay two thirds of the original value - but receive just over a third of the doses.

In a mutually agreed deal, the Department of Health said the UK order with Glaxo would now be capped at 34.8 million doses, including those already received, out of a total original order of 90 million doses from the firm.

The new deal includes an undertaking that the UK will purchase an as yet undefined amount of the H5N1 bird flu vaccine as well as courses of Glaxo’s antiviral flu treatment Relenza

It said there would be no cancellation fee and that the new arrangement represented “fair value” and “significant savings”, but would not comment further on the difference between the cut in payments and doses received.

The new deal also includes an undertaking that the UK will purchase an as yet undefined amount of the H5N1 bird flu vaccine as well as courses of Glaxo’s antiviral flu treatment Relenza.

The Department of Health said while it had initially ordered enough of Glaxo’s Pandemrix vaccine for the whole population, further evidence on swine flu had persuaded experts that total vaccination was unnecessary.

The cap on the vaccine doses to be received from Glaxo represents stock that had already been produced for the UK that the company “could not reasonably retract”.

Health secretary Andy Burnham said: “I am pleased we have reached an agreement that is good value for the taxpayer and means that the department has retained a strategic stockpile to protect the UK population without incurring a cancellation fee.

“This both protects the public purse and ensures the UK remains at the forefront of pandemic preparedness worldwide.”

He added that the chances of a bird flu pandemic - which could be more severe than swine flu - had “not diminished”.

The UK will now purchase bird flu vaccines to maintain a stockpile in case of any potential outbreak.