The Health Secretary admitted tonight that the NHS could be facing a deficit of £620 million this year.

Patricia Hewitt published the figures shortly after officials revealed that the new contracts for consultants and GPs had gone almost £400 million over budget. Pay arrangements for other NHS staff have also cost more than planned.

The Conservatives said that the deficit showed that health service finances were out of control, which would impact on patients. The Liberal Democrats said it was "no way to run the NHS".

"Turn-around teams" of financial and management specialists are to be sent into the organisations with the worst financial problems to help them save cash, NHS chief executive Sir Nigel Crisp announced.

He said that he expected the final deficit would be closer to £200m, which would be covered by "savings elsewhere".

The Lib Dems said that the Government’s reforms were creating instability in the NHS. The party’s health spokesman Steve Webb said: "This is the latest evidence of the financial crisis afflicting the NHS.

"Many hospitals are being forced to make drastic and swingeing cuts. The rollercoaster of NHS trust finances makes it impossible for hospital bosses to plan effectively."

Andrew Lansley, the Shadow Health Secretary, said: "NHS finances are spiralling out of control - the net deficit has more doubled since last year.

"Much of the money has been swallowed up in bureaucracy. Since 2000, an extra £1.6 billion in real terms has been spent on NHS administration staff.

"Patients will bear the brunt of this financial mismanagement as frontline services are cut to balance the books."

But Sir Nigel insisted that services for patients would not be compromised.

"Any actions that the NHS takes to reduce deficits should not lower the quality of care provided to NHS patients," he said.

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