The government has backtracked on plans to ban newly qualified hospital consultants from working privately for seven years.

Under a new NHS contract agreed between the government and the British Medical Association, all consultants will be able to run private clinics.

The contract, due to come into effect in April 2003, will also increase consultants' starting pay by 20%.

Contract facts

No ban on private work 20% increase in basic salaries Working week reduced to 40 hours Additional and improved rates of pay for extra work Protected time for research and administration

The government said the deal was "good news" for patients and doctors.

This is the first major renegotiation of the contract since the NHS was established in 1948.

The framework proposals will be voted on by doctors in early Autumn before they can come into effect.

Under the deal, the basic starting salary of consultants will rise to over �63,000 per year.

Other consultants will be able to earn up to �90,000.

Reduced hours

The average working week will be cut from an estimated 51 hours at present to 40 hours.

Consultants will be paid for any additional work outside of these hours, including carrying out operations to reduce waiting times.

The NHS is still getting a bargain

Dr Peter Hawker

Under the plans, the health service will have first call on consultants' free time before they are allowed to undertake private work.

NHS Trusts will be able to ask existing consultants to work an extra session or four hours each week before allowing them to do private work.

Newly appointed consultants may be asked to work an extra two sessions or eight hours per week before they can do private work. Both groups would be be paid extra for this work.

Consultants will also be paid and have protected time - up to 30% of their working week - for other duties such as research, training and training.

Announcing the contract, Dr Peter Hawker, of the BMA, said: "There is a good deal in prospect which is fair to consultants, and fair to the NHS.

"Consultants are the most highly trained and experienced professionals in our hospitals with unique skills that need to be properly valued.

Dr Peter Hawker negotiated the deal

"The proposed boost to their salaries is long overdue. The NHS is still getting a bargain."

Health Secretary Alan Milburn described the new contract as a "something for something deal".

"It offers more pay for NHS consultants so that more NHS patients benefit from more of their precious time and skills.

"Crucially, it recognises and rewards those NHS consultants who do most for the NHS."

Health Minister John Hutton said the government had not backtracked on introducing a private practice ban.

He said: "That is what we proposed at the beginning of the negotiations, but as we always made clear this was a matter for the negotiations to resolve."

Political reaction

Shadow Health Secretary Dr Liam Fox described the government's decision to scrap its proposed ban on newly qualified consultants carrying out private work as a "complete and humiliating climbdown".

This is a complete and humiliating climbdown by Alan Milburn

Dr Liam Fox

He said: "Alan Milburn has finally realised that it would have been outrageous - even for this government - to make doctors slaves of the state.

"The health secretary was desperate to introduce this ban to keep his backbenchers happy. But doing so would have been the height of stupidity.

"A ban would have caused huge damage to patients and the running of the NHS."

Forced to make a choice, said Dr Fox, some doctors might have opted to work exclusively in the private sector.

Liberal Democrat health spokesman Dr Evan Harris said: "If the government wants more consultant time in the NHS it should firstly establish more consultant posts."

Alastair Henderson, policy manager at the NHS Confederation which represents health service managers and was involved in the negotiations, welcomed the deal.

He said: "This new contract will be good for the NHS, good for individual consultants and good for patients.

"With the new arrangements for job planning and the working week, NHS organisations will now be far better equipped to manage and organise the work performed by consultants.

"This means that the NHS will be able to improve services for patients."