Milburn pledges £200m to placate rebels in foundation hospital vote

Alan Milburn, the Health Secretary, offered new concessions last night in an attempt to limit the scale of a Labour backbench rebellion tomorrow over his plans to set up foundation hospitals.

He said the Government would spend £200m, double the amount expected, to help to bring the poorest hospitals up to the standard of the best and give them all the chance to become a foundation hospital by 2008. Each National Health Service trust would be able to set its own timetable for performing well enough to win foundation status.

The last-minute moves were aimed at heading off a rebellion when MPs vote on the Health and Social Care Bill tomorrow. Some 133 Labour MPs have signed a Commons motion opposing foundation hospitals, enough to inflict a humiliating defeat on one of Tony Blair's flagship policies.

Yesterday the Opposition kept Mr Blair guessing on which way it would vote but warned that the Government could not rely on its support.

Although ministers hope to limit tomorrow's rebellion to between 50 and 100 Labour MPs – lower than the 139 who voted against the Iraq war – they could be vulnerable to defeats during the Bill's passage through Parliament.

Mr Milburn sought to answer criticism that his plans were elitist and would result in a two-tier health service by publishing a document, Raising Standards – Improving Performance in the NHS. It said the "vast majority" of trusts should be able to qualify for foundation status after a five-year programme of targeted help.

The Health Secretary said: "This is a policy for all, and not just for some. It is not about elitism or two-tierism. It is about levelling up, not levelling down. It is about raising standards in every hospital so that no NHS hospital is left behind."

But there is little sign that hardline opponents of the scheme are softening their stance. David Hinchliffe, Labour chairman of the Commons Health Committee, said: "The policy seems to be changing nearly hour by hour. The Government is lacking credibility. At the moment, I can't see any way the Government can give further concessions that could alleviate the very real anxiety among many MPs such as myself." In a report published tomorrow, the select committee is expected to raise doubts on foundation hospitals, warning that they might attract staff and patients from poor-performing ones.

Bill Morris, leader of the Transport and General Workers' Union, demanded a guarantee that the hospitals, which will have the power to vary pay rates, would not be able to "undermine, retreat from, water down or abandon" a national deal on wages.

But the Co-operative movement said it would support foundation hospitals because the Government was committed to involving local people in running them.

The Tories said the 55 Labour MPs from Scotland should not take part in the vote because the scheme would not apply north of the border. Liam Fox, the shadow Health Secretary, said: "We will make our intentions known on Wednesday in the House of Commons ... Our decision will be based on principle – will the Government's proposals produce a better quality of health care for the people of this country?"