Tony Blair is to arbitrate in the on-going dispute between the chancellor and the health secretary.

The Treasury is said to be blocking moves by Alan Milburn to give borrowing powers to new arms-length foundation hospitals.

Speaking on Monday, Downing Street warned both sides to halt "ill advised" media briefings.

"If people are silly enough to give a commentary on what's going on then they will by definition be giving a partial account," said a Downing Street spokesman.

Number 10 refused to confirm reports that the prime minister was set to broker a deal between his ministers, but signalled that negotiations would continue this week.

Blair's spokesman said that the prime minister "has meetings with senior members of his government most days". "We never comment on individual meetings," added the offical.

But Number 10 conceded that there was still a dispute over how the policy could be implemented.

"The principle has been agreed and was set out at the time of the Budget," said the spokesman.

"There is work to be done to move from general principles to detailed policies. That work is currently going on."

Downing Street added that a deal would not be concluded "in one meeting or two meetings, or today or tomorrow".

"It will take time and when that's concluded the government will set out its detailed policies," added the spokesman.