The firms will carry out 25,000 operations

Capio Healthcare and Nuffield Hospitals will carry out 25,000 extra operations over the next year.

They will concentrate on areas where the NHS is having trouble getting waiting lists down, such as hip and knee replacements.

The groups won the contracts after promising to carry out the operations for the same price as the NHS.

Extra capacity

Private firm Capio Healthcare runs 21 private hospitals in England. Nuffield Hospitals, a not for profit organisation, runs 43 hospitals in England and one in Scotland.

Both groups are expected to use spare capacity in these hospitals to carry out the operations.

We are concerned about the consequences this will have on the NHS Spokeswoman, Unison

The government's policy of using private and independent firms to treat NHS patients has come under fire in recent months.

Critics were particularly concerned that ministers were paying over the odds for operations that could be provided more cheaply by the NHS.

Figures published last October suggested that operations carried out by the private sector were as much as 40% more expensive than those done on the NHS.

Department of Health officials say the fact that firms are now charging the same as the NHS shows its policy of using private firms has paid off.

The government has signed contracts with a number of private firms in recent months to carry out extra operations.

However, most of these have been from overseas as British firms proved more expensive.

Officials say this latest deal shows that British healthcare groups are becoming more competitive.

'Great news'

Health Secretary John Reid hailed the deal. "This is great news for thousands of NHS patients, who will have their operations more quickly as a result of this agreement," he said.

"I am determined that no NHS patient should wait in pain where we can negotiate cost-effective agreements to use capacity already available in the independent sector in this country.

"This deal represents good value for the NHS because the cost for each operation and associated care is on a par with equivalent NHS prices."

David Mobbs, chief executive of Nuffield Hospitals, welcomed the deal.

"We are delighted that Nuffield Hospitals has been recognised by the Department of Health as providing high quality, value for money services and care to support the NHS."

Tim Elsigood, senior vice president and head of the Capio Healthcare UK business area, said: "This is good news for NHS patients.

"We welcome this opportunity to help the NHS meet its waiting list targets as well as providing further choice for NHS patients."

But the trade union Unison, which represents many NHS workers, said it had some concerns.

"We welcome the fact that thousands of patients will benefit from having these operations," said a spokeswoman.

"However, we are concerned about the consequences this will have on the NHS.

"We would like to see capacity in the NHS built up so that we don't rely on the private sector because when that happens we see cherry picking of patients and higher patients."