LONDON (Reuters) - Britain's coalition government said on Monday it would slow the pace of a radical shake up of the state-funded National Health Service, reflecting growing unease over the issue within the ruling alliance.
Tensions in the 11-month-old coalition surfaced last month when the Liberal Democrats, the junior coalition partners, voted for alterations to the plans at a party conference.
Health Secretary Andrew Lansley, a member of Prime Minister David Cameron's Conservatives, said the government would "pause, listen and engage" with those concerned over the proposals.
Under legislation currently before parliament family doctors in England will take charge of spending 60 billion pounds ($97 billion) of the NHS healthcare budget by 2013.
Two layers of management will be removed with the loss of thousands of jobs. It will also become easier for private companies to provide medical services in the NHS, free at the point of delivery and a treasured institutions for many Britons.
The changes are so significant that NHS chief executive David Nicholson says they can be "seen from space."
Critics say the restructuring is untested and overambitious at a time when the NHS is also being asked to find up to 20 billion pounds of efficiency savings over four years, equivalent to a 4 percent budget cut a year.
NHS funding has been ring-fenced by a cost-cutting government, but the coalition is seeking to make the budget go further to help cope with an aging population and more expensive treatments.
Lansley said the government would proceed with the basics of the reforms to the NHS, founded in 1948 and employing 1.3 million people.
However, he said he would consider changes to improve the accountability and transparency of the way family doctors would combine to commission health services for their patients.
Private companies would not be able to "cherry-pick" the most lucrative services, and competition for contracts would be based on quality, not price.
"No change is not an option. With an aging and increasing population, new technologies and rising costs, we have to adapt and improve," Lansley told parliament.
The opposition Labour party called on Lansley to drop the proposals altogether. "The more people see of the plans the more concerned they become," said Labour health spokesman John Healey.
If the reforms misfire Lansley risks undermining the work Cameron has done to free the Conservatives from the accusation they care little about the NHS.
The Liberal Democrats, already facing a drubbing at local and national elections in May, fear further punishment from voters if they are associated with damage to the health service.
"We have failed to make the case to the public," one government official told Reuters.