BBC News Online looks at what this will mean for the health service.

What form will the new targets take?

They are made up of 24 core standards and 10 developmental standards covering seven key areas.

The core standards will spell out the level of quality of care which every patient should expect.

They include targets such as all patients being able to access emergency care promptly, and all patients being provided with on the care they will receive.

The 'developmental' standards will set out what the NHS should aspire to deliver for patients.

They will cover the following areas: safety, clinical cost effectiveness, governance, patient focus, accessible and responsive care, healthcare environment and amenities, and public health.

Does this mean the star rating system for hospitals is to be scrapped?

No. Well, not immediately anyway. Mr Reid has stressed that the government is committed to the current three-star rating system for hospitals as a simple way of telling the public how well their local trust is performing.

However, the changes to performance targets could mean that hospitals are judged on different criteria when their star rating is determined.

Commentators believe that the government will eventually scrap the star rating system.

Sir Ian Kennedy, chairman of the Commission for Healthcare Audit and Inspection, which is responsible for the ratings system, has been quoted as saying it will eventually be abandoned.

What form did the original targets take?

The government set out a raft of performance targets when it announced its NHS Plan in July 2000.

These targets focused, in large part, on speeding up access to care.

For instance, people arriving at A&E departments were supposed to be seen within four hours, and GPs were told to offer an appointment within 48 hours of a request.

Were these targets controversial?

Yes. Critics said that health service staff were forced to overlook clinical need in the drive to meet targets.

This led, they said, to more straightforward cases being treated ahead of people with more complex conditions.

What does the government say?

Ministers are convinced the targets have driven up standards.

They quote figures showing more patients are now being seen quickly in A&E departments, and at GP surgeries, and even claim that targets have been instrumental in helping to cut deaths from cancer and heart disease.

But now they say that most of the original targets have been met, or will soon be met. Therefore, a new approach is needed to drive forward further reform.

This, they argue, must take place at a local level, and so it is inappropriate to set a whole raft of targets from the centre.

Will any of these targets continue?

Yes. The government plans that current targets on access to NHS services - such as waiting times - will continue until 2008.

Existing outcome targets in areas such as cancer and coronary heart disease will run until 2010.