Alan Milburn responded to criticism of his plans for NHS foundation hospitals by warning that "all options are open" in radical reform of the health service.

Speaking the day after the chancellor had warned that foundation hospitals would have to remain "fully within the NHS", the health secretary told a fringe meeting that "we are exploring options".

In a sign of support for Milburn's position, the prime minister said in his speech yesterday: "[We] require an end to the one-size-fits-all mass production public services. Why shouldn't our best hospitals be free to develop their services within the NHS as foundation hospitals?"