A second wave of NHS hospitals look set to gain controversial foundation status.

The government has announced that a further 32 three star NHS Trusts have completed the first stage towards becoming foundation trusts.

They join the 25 that have already applied and are on track to finish the process by the end of the year.

The announcement was made by health minister Lord Warner during the second reading of the health and social care bill in the House of Lords last night.

As more trusts apply for status it will become increasingly difficult for opponents to argue that the programme will lead to a two-tier NHS.

Ministers hope the pledge that all hospitals will achieve foundation status will head off a looming revolt over the issue.

"This clearly demonstrates a growing commitment to, and enthusiasm for, NHS foundation trusts across the NHS," said Lord Warner.

"If all these were successful, it is likely that over 25 per cent of the population in England would have access to NHS Foundation Trusts by the end of 2004."

But during the debate the government's plans were challenged by members of the House of Lords.

Conservative and Liberal Democrat peers began an attempt to make the flagship hospitals independent from health secretary John Reid's control.

They used the committee stage to attempt to amend legislation that will create the controversial hospitals.

Under the bill, trusts that reach key government tests will be allowed to become independent from local control and gain extra resources.

They will also be able to set their own pay and conditions.

But peers led by Baroness Cumberlege and Lord Alderdice have called for the hospitals to be taken away from the health secretary.

They want to create the NHS Agency for England to run the hospitals independent of John Reid's control.

Debate began on Tuesday and a final vote is expected in around two weeks.