In addition, he unrevealed the interim findings of an independent review which concluded general taxation is the best way to fund the NHS.

Doctors

British Medical Association chairman Dr Ian Bogle said the new money was very welcome, and would make a significant difference, but what was equally important was the promise of stable investment.

Dr Ian Bogle said long-term investment was badly needed

"It takes ten to 15 years to train GPs and hospital consultants and we need to have a planning horizon which recognises the need for sustained, long term increases in funding and careful workforce planning.

"The NHS has been underfunded for so long that pouring money into the system is like watering parched earth.

"Initially, it runs off with little obvious effect."

Dr Bogle said that the UK currently only had half the number of doctors per head of population that other developed countries employ.

This was responsible for 5,000 excess patient deaths per year.

"Medical practice changes very fast. New techniques, drugs and treatments offer new hope to patients but at a high cost.

"We have the skills and the commitment to offer patients the best health care in the world.

"The resources now need to match the ambitions of medical and nursing staff."

Dr Bogle said the Wanless report backing for the NHS to continue to be funded from general taxation mirrored the BMA's view.

Nurses

Dr Beverly Malone, general secretary of the Royal College of Nursing (RCN), echoed Dr Bogle's view.

She said: "We applaud the emphasis upon increasing the capacity of the NHS, which will mean investing in staff, as well as in developing services."

Dame Pauline Fielding, director of nursing at Royal Preston Hospital, is in charge of a unit which is already �350,000 in the red.

Dame Pauline Fielding said �1bn was not a lot of money

She said: "A billion pounds in the grand scheme of things is not a lot of money.

"But any increased funding which helps us to improve services for patients has to be welcomed.

"What patients want is to be able to spend more time with the consultant, they want more time to talk to the nurses.

"In order to achieve that, and give patients what they want, we really need to increase capacity in the NHS significantly."

Independent think tank

The King's Fund, an independent healthcare think tank, said general taxation was the "fairest and most efficient way" of funding health care.

We may, therefore, have to wait some time before the signs of improvement become visible

King's Fund

"We also welcome the emphasis in the Treasury report on significant and sustained increases in NHS funding through taxation for the foreseeable future.

"Increases in NHS funding take many years to bear fruit.

The spokesman said it was equally important that increases in NHS spending were matched by a similar investment in social care.

"It is already evident that social services struggle to keep up with NHS activity rates. If social care spending falls any further behind the NHS, we can expect to see more and more people admitted to hospital for avoidable illnesses and injuries and more delayed discharges."

"To keep pace, it needs an extra �700 million each year over and above the sum the Government has already pledged."

Health service managers

Stuart Marples, chief executive of the Institute of Healthcare Management (IHM), welcomed the commitment to both short and long term funding increases for the NHS - from the public purse.

We need more doctors, nurses and beds and, put simply, these are not grown on trees

Nigel Edwards

However, he warned that "the ageing population, technological advances, sociological changes, workforce expectations and carer provision, will continue to put huge strains on existing budgets."

The NHS Confederation said a new approach to funding the NHS had to be matched by a new approach to the way the service was managed.

Nigel Edwards, acting chief executive said: "A debate about the funding but not supply would miss the point over the short term and cause increasing frustration.

"It will take time to improve the NHS because we need more doctors, nurses and beds and, put simply, these are not grown on trees.

"It takes six years to train to be a doctor, three to be a nurse and fifteen to be a consultant. We need to find a way to understand and live with this reality."