Patients will be allowed to pay privately for drugs and still receive NHS treatment under plans to be announced by the Government in the next fortnight.
Under current rules, hospitals may withdraw treatment from patients who want to use their own money to buy drugs not available on the health service.
Alan Johnson, the Health Secretary, is preparing to announce that top-up payments will be allowed. Mr Johnson says he wants a fair system that does not deny people essential treatment unduly.
Concerns have been raised that such a move would create a two-tier health service where wealthy patients buy life saving treatments denied to those who cannot afford them.
The principle of free NHS care will be maintained and he is determined to stop people feeling pressurised into buying private drugs.
The Government ordered a review into top-up payments earlier in the year. There has been a public outcry after some NHS hospitals refused to treat those paying for their own drugs or other treatments. The issue has been highlighted after the NHS rationing watchdog, the National Institute for Health and Clinical Excellence (Nice), refused to approve a series of life-prolonging drugs on the NHS because they were too expensive.
Medical groups and NHS managers have said that the ban should be lifted. NHS patients can already buy hearing aids, dental and even nursing care privately.
Insurance companies believe the change in policy could lead to a sharp rise in the number of people buying insurance to pay for drugs not available on the NHS.