The health secretary has again hinted that the government will next week announce tax rises to fund higher levels of investment in the NHS.

Speaking to a conference on leadership in the NHS, Alan Milburn pointed to rising investment and stressed there was still a lot of catching up to do.

The health secretary said that reform of the health service would continue, with control over services being devolved to frontline staff.

Ahead of next week's Budget announcement, which is expected to see a substantial boost for NHS funding, Milburn said the problems of the NHS stemmed not from the system of funding, but with the levels of funding.

"As a government, we recognise that the limitations of Britain's tax-funded health service have not been the system of funding from general taxation but the level of funding from general taxation," he said.

"In just a few days time there will be a choice for our country. To go back to the days when the approach on the NHS was one of cutting taxes, cutting spending, cutting services and in the end therefore forcing more people to pay for their own care. Or to continue to move forward with sustained investment matched by fundamental reform."He added: "I believe passionately that the right way forward for our country is to continue investing and to press ahead with reform."

Signalling that the public would have to pay more for better healthcare, Milburn said "world class health care costs a little more".

"Putting the health service on a sustainable footing for the long term will pay dividends for us all in security for ourselves and our families," he said."What we have started in the last few years we should see through. The NHS today is the fastest growing health care system of any major country in Europe. But there's a huge amount of catching up to do."

Making the argument that the public would see a benefit from the higher levels of funding, Milburn said there would be no "big bang" improvement but steady, sustained improvement.

"The only way to keep progress coming through is to keep the investment going in. And to use the resources to reform how health care is delivered," he said.

'Cynical' opponents

Following the row over possible Conservative plans to push for a "self-pay" system of healthcare, Milburn said Labour's opponents were "embarked on a quite deliberate and cynical strategy of first undermining the NHS as a prelude to their real agenda of tearing down the NHS and forcing people to pay for the costs of their own treatment".

He pointed to the US experience, where he said 40 million people had no health cover at all. He said: "Do we really want doctors in this country reaching for your wallet before they reach for your pulse? I think not."

Funding boost

The speech comes as reports indicate the NHS could be set for a significant funding boost when Gordon Brown unveils his Budget next week.

Friday's FT predicts that funding could rise by up to £18 billion over the next three years. The chancellor could also make a longer term commitment to the NHS's funding.

Funding could rise by over seven per cent above inflation until 2005/06, funded by tax increases of around £5 billion a year. If funding rises at this rate, Milburn will see his budget rise by about £15 billion a year.

The paper predicts that the chancellor will announce the department of health's allocation under the three year comprehensive spending review, leaving other departments fighting for the remaining available cash.

Taxation plans

Ahead of the Budget, the chancellor yesterday stressed that improvements in the NHS must be funded through general taxation.

At Treasury questions, Gordon Brown seized on reports that the Opposition was proposing a system of "self-pay" for healthcare. The revelation led to accusations that the Tories had a "secret plot" to kill-off the NHS.

Shadow health secretary, Dr Liam Fox, came under fire after it emerged that he had told a private meeting that the NHS "can't work and won't work".

Said Brown: "We now find this morning that the Conservatives are planning the dismantling of the National Health Service. The question is what is the best system of funding healthcare for the future."

Lib Dem MP David Laws urged the chancellor to ring-fence the money raised by tax increases.

"He undertook to use the Budget statement to put the health service on a long-term stable financial footing," he said.

"In an environment in which governments come and governments go is not the only way of achieving that for the long term either to have a dedicated health tax or to have a system of social insurance for the NHS?"

John McFall told the chancellor "to use his Budget to invest more money in the National Health Service".

"A publicly funded NHS is the only way forward for the well-being of everyone in this country," he said.

Labour's Barry Sheerman said the chancellor should "not be deterred" from long-term investment allied to reform in the NHS.

The shadow chancellor, Michael Howard, said: "Survival rates for lung cancer are lower in England and Wales than they are in France in Germany. If the UK was as a good at treating cancer as the best in Europe, 25,000 lives would be saved in this country every year. In Germany waiting lists don't exist.

"Does he still think, as he told the Social Market Foundation last month, that we have no lessons to learn from the way they provide healthcare elsewhere?"