Tony Blair says that the Conservatives are planning to take �1.2bn out of NHS spending to pay for private operations.

Mr Blair said this policy was the "tip of the iceberg" and was doubly unfair, as it would be subsidising the better-off while hurting ordinary people who would face longer waiting lists in a denuded service.

The Conservatives say their policy is fully costed and would in fact relieve pressure on NHS waiting lists.

The Conservative health manifesto, Action for Health, says that patients who choose to go private and free up NHS space for other patients should not be punished, but helped.

If the independent hospital charges more than the NHS, they will be entitled to 50% of the NHS cost of their operation as a contribution to their bill.

Around 7.5m people have private health insurance, and around 700,000 self-pay for private care. The policy is expected to cost of around �1.26bn a year, to be funded by savings in other parts of the NHS budget.

The cost of most private operations is around double that of NHS costs, so the policy would definitely benefit people who could afford the costs (which could still run into thousands of pounds).

The issue is whether most of these people were already planning to have their operations in the private sector anyway, or whether the policy would encourage more people who are on NHS waiting lists to seek private treatment.

A respected health think tank, the Kings Fund, says the policy does have a high "dead weight" cost, as many people who are already planning to go private would take advantage of the subsidy.

But the policy does not mean that the Conservatives are abandoning the principle of the NHS free at the point of use.

Everyone would still have the right to receive free NHS treatment if they wanted.

Labour says while this is true, waiting lists would be longer because the plan takes money out of the NHS budget.

And they argue that diverting more paying customers to the private health care sector means that there would be fewer beds available for the NHS to sub-contract for its own use.

Conservative plans could affect some aspects of NHS care if they were unable to realise the savings which they say they will use to fund the scheme (including the abolition of strategic health authorities and the end of commissioning in primary care trusts).

Many experts, including the Kings Fund, say these savings are questionable as the NHS will still need some management functions.

Both Labour and Conservatives plan to expand the use of the private health sector to provide more services and give patients more choice.

Under Labour plans, up to 15% of NHS operations could be provided privately, and patients would have the choice of any NHS hospital by 2008, including private hospitals as long as they charged NHS rates and were sub-contracted to the NHS.