Patients suffering from head and neck cancer are to be denied a new drug on the NHS because it is claimed it does not offer better or cheaper treatment than existing drugs.

The National Institute for Health and Clinical Excellence (Nice) has rejected Erbitux (also known as cetuximab) for cancer sufferers in England and Wales.

The decision is contained in draft guidance and is subject to appeal.

Campaigners said the move was a blow to patients because the drug is the first one licensed in the past 40 years for treating locally advanced head and neck cancer.

In January, Nice also rejected an appeal from charities over its decision to reject Erbitux for bowel cancer patients.

Today's decision covers using Erbitux in combination with radiotherapy for the treatment of locally advanced head and neck cancer.

"The evidence presented to the independent advisory committee did not persuade them that cetuximab works any better or offers better therapeutic value than existing treatments for head and neck cancer," said Nice chief executive Andrew Dillon.

"The NHS has finite resources and it is our job to ensure that these are spent on treatments that confer enough of a benefit to patients in relation to the amount of money they cost."

Erbitux plus radiotherapy increases the average survival for patients from 29 months to 49 compared with patients who receive radiotherapy on its own.

More than 7,800 people are diagnosed with head and neck cancer in the UK every year.

Dr Vinod Joshi, of the Mouth Cancer Foundation, said: "This is an extremely sad day for people living with locally advanced head and neck cancer in England and Wales. Nice has effectively denied them this new treatment option for a chance to live longer."

Christine Piff, of the head and neck cancer support group Let's Face It, said: "I am devastated by the news. Head and neck cancer continues to be the Cinderella cancer, receiving little or no attention from the NHS."

Denise Richard, head of the oncology business unit at manufacturers Merck Serono UK, said: "We are seriously considering all of our options with regards to appealing this decision."