Stockport PCT has told practices that only excisions performed with a scalpel and tied with sutures will qualify for reimbursement under the DES.
GPs stand to lose up to 90 per cent of their minor surgery reimbursements.
Punched skin biopsies and all non-scalpel minor surgery would be debarred.
'Virtually everything we do would be excluded,' said Marple GP Dr Keith Wells, whose practice stands to lose several thousand pounds. Dr Wells said he would have 'no hesitation in taking legal action' against the PCT.
'They are redefining something that was agreed in a national contract,' he said.
The minor surgery DES only defines an excision as an invasive procedure.
However, in a letter to all practices, Joan Dickson, the PCT's primary care modernisation clinical lead, defined a reimbursable excision as one requiring a scalpel to take an elliptical area of skin around the lesion and closure with sutures.
Dr Wells said the letter was written by someone 'who has never worked in primary care'. His practice uses a Hyfrecator electrosurgical machine to remove lesions, eliminating the need for both scalpel and sutures.
Stockport LMC chairman Dr David Gilbert is demanding that the letter, sent without consultation with the LMC, be withdrawn.
The open definition of an excision in the DES has led to variations in interpretation across the UK, he said. Some PCTs require an anaesthetic to be used.
Dr Wells said vasectomies would no longer be classed as minor surgery: 'I have a contract with Stockport PCT for 300 vasectomies a year for which I don't use a scalpel or sutures.'
GPC negotiator Dr Richard Vautrey said: 'You can do quite extensive minor surgery without a scalpel. This needs to be recognised in the DES.'
Roger Roberts, Stockport PCT's governance lead, said that work was ongoing to address the problem of defining minor surgery. The LMC and PCT were due to discuss the issue this week.