The Department of Health has announced it will cut its own manpower by a third.

Officials announced the focus will be on a cull of smaller NHS agencies.

Health quangos, which now cost the taxpayer £2.2 billion, are to be cut as part of a wider onslaught on NHS bureaucracy.

John Reid, the health secretary, has ordered a review of the need for 31 health watchdogs and quangos, which employ nearly 20,000 staff.

Nigel Crisp, the NHS chief executive, will have until next April to decide whether the bodies should be axed, merged or privatised.