Several PCTs across three SHA areas face losing money, having pre-paid for a year's worth of operations at the Trent and South Yorkshire ISTC, at Barlborough NHS Treatment Centre in Derbyshire.

Derby City PCT admitted to using a 'package of measures' to boost the number of orthopaedic treatments at the centre, including providing 'a financial return to GPs when patients attended'.

A spokesman told GP: 'The PCT undertook a number of different actions to try to ensure maximum uptake of the capacity of this service in recognition that under-utilisation would, in effect, mean extra costs to the PCT.'

In some cases, patients' transportation to the centre was paid for. Despite these measures, the PCT maintains that 'patient choice remained the deciding factor for where patients had their treatment'.

Dr John Grenville, secretary of Derbyshire LMC, said the PCT has since backed down from offering GPs payments, but continues to 'encourage' GPs to refer there.

The LMC told the PCT it believed that payments to GPs to refer to the ISTC, although not illegal, were unethical.

'Practices instead have agreed to give "due prominence" to the ISTC - to tell them all about the wonderful things they do there,' said Dr Grenville.

GPC deputy chairman Dr Richard Vautrey said such payments were 'isolated incidents'.

'It is a reflection of the difficulties PCTs face when forced to do things by the government,' he said.

'These contracts cost PCTs a significant amount of money even when the centres are not being used.

'Patients should be able to choose where they go - that is something we fully support,' he added.

BMA guidance, issued on the subject of payments for referrals, says GPs can take payment for viewing and analysis of referral habits, but should avoid taking payments to refer in a certain way.