Many doctors oppose foundation trusts

It follows the rejection of the policy by delegates at the Labour Party conference in Bournemouth.

Dave Prentis general secretary of the biggest health workers' union Unison, who proposed the conference motion, said the plans should be shelved.

The British Medical Association urged ministers to "listen to just about everyone" and drop the policy.

While the defeat is an embarrassment to the government, it is very unlikely to derail the policy.

Ministers believe freeing top-rated trusts from Whitehall control will drive up standards in hospitals across England.

Controversial plans

Under the plans, foundation trusts will have much more freedom than other NHS hospitals.

They will be able to raise extra cash by borrowing privately and keep the proceeds from the sale of their own land, for the first time.

Hopefully they will listen to just about everyone telling them to think again on this issue Dr Edwin Borman, BMA

They may also be able to set their own pay and conditions for staff.

The plans, which only apply to England, are controversial because only those trusts that obtain three stars in the government's NHS ratings are eligible.

This has raised fears that the vast majority of trusts will be left behind and that the policy will create a two-tiered health service.

Unison general secretary Dave Prentis said the government should take on board the views of Labour Party members.

"All we want to do now is say to the government that this is your chance to listen.

"We want to sit down and talk about how to deliver the best possible health care for all our people," he said.

Dr Edwin Borman of the BMA's consultants committee urged the government to think again.

"I know the government probably won't, but hopefully they will listen to just about everyone telling them to think again on this issue," he told BBC News Online.

"If only a limited number of trusts are selected in the first wave of foundation trusts then we learn from previous experience that they will get preferential treatment and inequalities in the health service will increase.

"In addition, if all trusts eventually become foundation trusts then we are clearly talking about a very different national health service, if we can call it a national health service at all," he said.

"The BMA's concerns are well founded and have the wider needs of the NHS at its foundation."

Beverly Malone, general secretary of the Royal College of Nursing, said: "We still have concerns that foundation trusts could widen existing health inequalities and geographical disparities in health services."

She added: "The RCN urges the government to address the concerns raised today and ensure that foundation trusts adhere to the core founding principles of the NHS to provide seamless high quality patient care."

However, Gill Morgan, chief executive of the NHS Confederation which represents health service managers, said it supported the policy.

"We still believe foundation trusts are a step in the right direction provided they free up frontline staff and make the NHS more accountable to local communities," she said.

Political attacks

Opposition parties seized on the conference vote to attack the government.

"Labour's health policy is in a state of utter paralysis," said shadow health secretary Liam Fox.

"It is now obvious that Labour cannot and will not be able to deliver the reforms that the NHS needs."

Liberal Democrat health spokesman Evan Harris said: "John Reid has lost the vote and the argument on foundation hospitals.