GPC negotiator Dr Peter Holden warned that a failure to tackle rising expenses would force practices out of business and ultimately leave the NHS facing far higher costs.
He said the issue had become the number one priority for GP negotiators.
'We are where we were in the 1970s,' he warned. 'We are in a scenario where rising expenses are not being met, but are eating into what we already have. Sooner or later that pressure cooker will blow up.'
Dr Holden's comments came as a poll revealed a 22.8% rise in costs for small businesses over the last five years. The rise outstripped the rise in inflation as measured by the consumer price index, which totalled 19.4% over the same period, according to the poll by small business savings advisors Make It Cheaper and the Centre for Economic and Business Research.
A total of 48% of GP, vetinary and dental practices warned that they could go out of business if nothing was done to address the imbalance between rising costs and income.
Dr Holden said that when the Doctors' and Dentists' Review Body was next asked to report on doctors' pay, it would make recommendations the government would find 'unpalatable'.
But he warned it was vital to fund primary care properly. 'Without good primary care, overall NHS costs will rocket,' Dr Holden warned. 'Experienced GPs are the best and most cost effective way of managing the NHS – we keep the lid on costs.'