The bill has proved highly controversial

Ministers used the support of Scottish Labour MPs for their plans to introduce the controversial system in England and Wales.

The Health and Social Care Bill - which includes the proposed introduction of foundation hospitals - was passed with a majority of 17, by 302 votes to 285 on Wednesday afternoon.

The measure was rejected by the House of Lords later in the evening.

In the early hours of Thursday morning, the government secured a larger majority of 41 to reinstate the foundation hospital system, which would allow hospital managers greater financial freedom.

The government's greatly reduced majority has been obtained through Scottish members of parliament Tim Yeo Shadow health secretary

The measures will not apply in Scotland, as health is a devolved matter.

The Conservatives said the bill had been approved on the votes of Scottish MPs, which shadow health secretary Tim Yeo branded an "outrage".

"The House has just approved a measure whose impact is felt exclusively in England," Mr Yeo said in the Commons.

"The government's greatly reduced majority has been obtained through Scottish members of parliament.

"What advice do you have for those of us whose constituents will regard this as a constitutional outrage?"

UK Health Secretary John Reid - himself a Scottish Labour MP - described Mr Yeo as a "pathetically bad loser".

The Scottish National Party also voted against the bill and the party's Westminster leader Alex Salmond said allowing hospitals to raise their own finance would squeeze health spending north of the border.

Mr Salmond said: "The Scottish Labour MPs have imposed upon England a measure not only unpopular in England, but to the detriment of the Scottish health service."

West Lothian question

An analysis of voting figures suggested 43 Scottish Labour MPs voted with the government, nine abstained and two, Anne Picking and Ian Davidson, voted against.

Supporters believe foundation hospitals will enable health care to be more responsive to an area's needs, but critics argue that allowing some hospitals to borrow money could lead to a two tier NHS.

Wednesday's vote in the Commons was a classic example of the West Lothian question, with Scottish MPs being asked to decide on something that will not affect their own constituents.