Stephen Byers has questioned whether PFI hospital projects are delivering value for money.

The former transport secretary welcomed new Treasury procedures which reveal the true costs of PFI in relation to government borrowing.

"There is little doubt that the first 11 major hospitals would not have gone ahead if the new rules had applied," he said in a speech to the Social Market Foundation.

Byers outlined the steps that need to be taken to secure greater transparency and accountability and to ensure that there is a "level playing field" between PFI and its alternatives.

And he said that tougher rules governing the use private sector cash will ultimately build support for the concept.

"It will never be possible to secure political support for PFI if people feel that the rules are rigged in its favour and that it is the only means by which a project that would bring real benefits will gain approval," the former trade and industry secretary cautioned.

"There should be no presumption in favour of PFI. The crucial test has to be what is in the public interest.

"There needs to be a real choice between a range of financing options in order to identify the one which will achieve value for money.

"This means that there must be no incentives or restrictions which benefit PFI over other approaches."

Byers had a reputation as being an "ultra-Blairite" during his time in government.

The prime ministerial favourite was the first man promoted into the Cabinet in 1998 but was forced to resign as transport secretary after a series of controversies involving his special adviser Jo Moore.

In his series of SMF lectures, the Tyneside MP is attempting to recast himself as a government friendly policy thinker.