Thousands of doctors and nurses may be sacked unless they agree to drastic changes to their pay and conditions as hospitals strive to make billions of pounds worth of savings, it has been claimed.
NHS bosses have suggested terminating all staff contracts and reoffering them on different terms, according to a leaked document obtained by The Sunday Times.
New terms could include pay cuts of up to 5%, an end to overtime for nights, weekends and bank holidays, and reduced holiday leave, the newspaper said.
These measures could affect up to 60,000 health professionals in the South West of England, where chief executives have acknowledged they would need to act "in unison", the paper reports.
The document was prepared by 19 NHS bosses to identify how to maintain patient services in the face of multimillion-pound budget cuts, The Sunday Times adds.
But Labour's shadow health secretary Andy Burnham told Sky News the suggestion of making staff redundant was "sheer madness".
"What we're seeing here is signs of an NHS... in distress. [It's] a chaotic approach really, to managing these cuts. What we have is a document from the South West where 19 NHS organisations are talking about some pretty drastic steps," he said.
"This really is no way to go about things. It's in open defiance of the Deputy Prime Minister who has said there won't be regional pay in the national health service. So the Government urgently needs to get a grip."
The Sunday Times claims at least two other hospitals in Surrey and Manchester (Frankfurt: A0ETDJ - news) have considered the plans, but health chiefs in the South West suggest working together in order to prevent being "singled out" and unable to take on the unions.
They believe that by co-operating they will be able to overcome an "extremely hostile" reaction to the steps, especially if they take the "last resort" of sacking all staff and re-engaging them on less favourable terms, the paper says.
Earlier this month, the Institute for Fiscal Studies said NHS spending to 2015 will be the tightest four-year period in the past 50 years amid the biggest reorganisation of the health service by the Government.
Monitor , the independent regulator for NHS foundation trusts, has estimated that organisations with a turnover of £200m will need to produce savings of around £9m a year for each year until 2016/17 to remain in financial health.
The chairman of the South West pay, terms and conditions consortium steering group said the NHS faces a time of unprecedented challenge, both financially and in the provision of services to patients.
Chris Brown, who is also chief executive of Poole Hospital NHS Foundation Trust , did not deny doctors and nurse could be sacked, but said: "As these plans take shape I would like to reiterate our commitment to continue to seek to work positively and constructively with staff as well as unions.
"At the heart of the consortium's work is a shared desire to preserve and protect employment while safeguarding high quality health services for the populations we serve into the future."