Rules, they say, are made to be broken. There was never anything sacrosanct about Gordon Brown's fiscal rule, which has restricted public sector debt to less than 40 per cent of national income.

And these are difficult times. Other countries are borrowing well in excess of that level as they slither into recession. France, Germany and the US each have debt levels above 60 per cent of GDP. And embarrassing as it may be, at least it is its own rules the Treasury is thinking of breaking or, rather, rewriting. Decisions to breach international accounting rules, by comparison, provoke the question: why? What is so different about us? Who gains from non-compliance? And what happens when the house is finally put in order?

It would have been a rich irony if stricter accounting processes for the private finance initiative had been the straw that broke the camel's back. In February, when the Department of Health was panicking over the consequences of implementing international financial reporting standards, eventually securing a one-year delay, it seemed the forced changes in PFI accounting might dump an extra£30bn (around 2.5 per cent of GDP) onto the national balance sheet. More than enough to take public debt through the 40 per cent barrier.

But the economic slide has blown bigger holes in Treasury estimates for 2008-09. Falling growth means fewer jobs, causing a vicious combination of lower income tax, lower national insurance receipts and increased social security payments. Rising energy and food costs mean reduced VAT revenues as consumers defer spending on other goods. A collapse in the housing market means less stamp duty. These trends affect the NHS too and the PFI issue hasn't gone away. Next April it will be back with a vengeance.

Private funding

For nearly 15 years the NHS has used PFI funding to renew its land, buildings and equipment. The essence of PFI is borrowing (from banks) for capital projects instead of using tax revenues, structuring the deals to keep the assets, wherever possible, off the government balance sheet. A Conservative wheeze devised in the early 1990s, it was adopted by Labour in 1997.

Health, with its ambitions for rapid estate modernisation and its increasingly centralised procurement processes, bought into the idea of PFI - much more than, for instance, canny local authorities. Now the English NHS, starry-eyed for years about the benefits of markets and privatisation, finds itself with far greater exposure than the rest of the UK.

The balance sheet bit is the key. A trust balance sheet is meant to show all the assets the trust owns, matching them with its liabilities. (In commercial accounting the difference - what the organisation is worth - is known as "the bottom line".) But it depends on what you mean by "owns". The touchstone of ownership in the public sector, based on a Treasury interpretation of two financial reporting standards (specifically FRS 5 and statistical standard 95 of the European system of accounts), has up to now been about carrying the risks and rewards of providing the asset.

Smoke and mirrors

On the strength of this interpretation a substantial and lucrative industry grew up, advising trusts and other would-be PFI partners on how to prepare their business case to get the "correct" answer - and the new hospital. Naturally, trusts and their boards played along. The steer from the centre was clear: for major capital investment, PFI was the only game in town. The accountancy profession remained curiously silent about what others were coming to regard as financial smoke and mirrors. In a number of instances substantial physical assets - real bricks and mortar - were not to be found on any balance sheet.

International financial reporting standard 12 - not an EU pronouncement but a broader international one - takes a different view. Ownership should be determined not by a malleable apportionment of risk, but by where practical control of the asset lies. Under this, many PFI-funded assets will, for the first time, form part of NHS accounts, treated as if they were finance leases. Their total value could be around£10bn.

So anxious was the DH about the potential impact that, until February, it appears to have lobbied the Treasury not to adopt IFRS 12. Now the clock is ticking on the 12-month stay of execution it eventually secured from the Treasury's financial reporting advisory board. Without the integrity of Mr Brown's 40 per cent rule as a hostage, no further latitude appears likely.

The impact next April will be immediate.

Depreciation of assets

When an NHS body owns a capital asset, it pays an annual depreciation charge to reflect its decline in worth, typically calculated as a percentage of its original cost, and a capital charge, currently set at 3.5 per cent, to reflect the opportunity cost of tying up resources.

Both costs will hit NHS and foundation trusts' 2009-10 revenue accounts. Without extra income to compensate, deficits are likely to follow and foundation trusts may breach the terms of their authorisation.

It will be tempting to present the impact as a "change in accounting treatment" or a "technical adjustment" but in reality the NHS will, after a lengthy holiday, be properly accounting for the use of its assets. Perhaps an adjustment to payment by results will be used to soften the blow for individual trusts. But someone, somewhere, will be paying the cost.

At a time when finance directors are already struggling with spiralling price inflation, particularly on energy and transport and with the sustainability of last October's 4 per cent annual growth commitment looking more fragile by the day, the NHS may have stumbled on a solution to the embarrassment of foundation trust surpluses.