This is on top of the savings already made through staff reductions and clustering PCTs and strategic health authorities.

Kieran Walshe, professor of health policy and management at Manchester Business School, said there were many advantages to the NHS sticking with the current transitional management structure of 50 PCT clusters and four strategic health authorities.

Writing in the BMJ, he said it would end the current damaging organisational uncertainty and was also the least costly management structure the NHS had known for two decades.

Going ahead with the Bill, however, would mean setting up the NHS Commissioning Board (with annual running costs of £492m), 260 clinical commissioning groups (with annual running costs of £1250m) and the new economic regulator Monitor (with its anticipated running costs of £82m). Each of these new statutory organisations will have additional set-up costs-perhaps amounting to a one-off spend of £360m.

'If the Bill were stopped now it would save all those set-up costs and at least £650m in annual running costs - just over £1bn in 2013.'

He admitted the £650m was a 'finger in the air figure but it is, I think, quite a conservative one based on the current figures being provided'.

The new PCTs and SHAs could take forward much of the work done by 'nascent clinical commissioning groups (CCGs)' to engage GPs and others in commissioning. It would also resolve the conflict of interest problems that continue to dog CCGs.

'I think the transitional structure put in place is in fact quite a robust one. It’s done a remarkable job of keeping things on the road over the last 18 months and in that sense it’s already been stress-tested.

'Veterans of past NHS reorganisations would argue that the value of structural change is much over-rated and that the existing structures could prove just as fit for purpose as those envisaged in the Bill.'

He acknowledged that dropping the Bill would be politically painful and damaging for the government.

'However it might well be worth paying a short term political cost to avoid some of the longer term political consequences of the legislation and its implementation,' he added.

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