NEW NHS trusts with greater freedom from Government control could be in place by the end of next year, Health Secretary Alan Milburn has announced.

In a speech to hospital managers in London, Mr Milburn outlined the timetable for NHS Foundation Trusts, which are part of reforms aimed at creating increased diversity and freedom.

The trusts will have the freedom to improve services without day-to-day interference from Whitehall, he said.

The first wave will have to achieve a three-star rating by July and demonstrate management, clinical and local primary care trust support.

The trusts would not be subject to the Secretary of State's powers of direction. Instead they would be held to account by performance contracts and inspection.

Mr Milburn dismissed suggestions that the idea was a form of back-door privatisation.

''They are all about unleashing the spirit of public service enterprise that exists within the NHS but, in my view, has been stifled for too long," he said.

Northumbria Healthcare NHS Trust is among those interested in the new devolved powers.

Sue Page, chief executive of Northumbria Healthcare, which runs North Tyneside General Hospital and hospitals in Ashington and Hexham, said: "We will be able to change the roles of our clinicians and to use multi-skilling to make more effective use of specialists. We will be able to recruit more doctors and nurses and train them to the highest possible standard.

Alan Gaynor, associate medical director at Northumbria, said red tape would be reduced, allowing the trust to respond more quickly to local health demands,.

Unison, the UK's largest health union, welcomed the extra freedom but warned it could create a ''poor relation'' within the NHS.

The British Medical Association also warned that the new foundation trusts should not create a two-tier system.