The minister had come in for criticism from senior health officials and politicians over her blueprint for change, focused on the scrapping of five existing health authorities.

A management layer will be cut at hospitals

It is expected Mrs Hutt will announce an all-Wales strategic body to Assembly Members on Thursday - instead of three regional bodies, as outlined earlier this month.

Mrs Hutt was understood to be against an all-Wales structure and wanted the regional bodies to oversee a complex structure of 22 local health boards and 12 health partnerships.

But critics argued for a simpler system.

The Liberal Democrats - Labour's administration partners - are understood to have been annoyed by the plans.

It is understood a deal was struck between the two parties on Wednesday afternoon.

The minister has been forced to surrender to pressure from ourselves to drop the earlier proposals

Dr Dai Lloyd, Shadow Health spokeman

Critics of the original plans, such as Plaid Cymru health spokesman Dr Dai Lloyd - a working GP - had argued the health service needed stability, not another re-vamp.

Dr Lloyd said: "I understand Jane Hutt will announce she will set up an all-Wales body to commission health care.

"We demanded this a long time ago and the Minister has been forced to surrender to pressure from ourselves to drop the earlier proposals."

Conservative health spokesman David Melding called the move a "considerable c

The new look health service will manage and implement key services, such as the specialised burns unit at Morriston Hospital, Swansea.

Mrs Hutt was urged to rethink her proposals following a heated debate earlier this month.

The plans involve replacing five health authorities

Opposition parties had criticised the level of bureaucracy and expense of Mrs Hutt's plans.

Plans for the radical blueprint for the management of the NHS were first outlined in the spring.

Under the changes, part of a 10-year plan to modernise the NHS and remove management tiers, the five existing health authorities who control and buy health services for their area will be abolished next April.

The assembly has put the changes out to wide consultation and no less than 345 different organisations and individuals have taken part in the process.

Unions are also against the plans. The public health services union Unison believes jobs will be lost if the changes are implemented.

Plaid's Dr Dai Lloyd: Opposed to the plans

Health organisations such as the BMA as well as GPs have expressed their concerns.

GP Andrew Deardon urged the politicians to listen to those working with the patients themselves.

A survey of senior managers working in NHS trusts and health authorities, found that the majority believed the new structure was less accountable, offered worse value for money, and consisted of too many separate bodies.

Similar moves are planned in Scotland which is to scrap 43 health trusts there and replace them with 15 health boards.

In England, though, both health authorities and trusts remain in place.