North Yorkshire and York PCT suspended some procedures, such as treatment for bunions and varicose veins, last December as part of short-term measures to save money in the final quarter of the 2006-7 financial year.

At the time, the PCT was predicted to be £45m in the red by the end of this month, making it the most overspent organisation in the whole NHS.

A "prior approval" panel decides on whether to refer cases in exceptional circumstances but local GPs say they have no confidence in this system and claim that limits on treatments place patients at risk.

PCT primary care medical director David Geddes told yesterday's board meeting in Selby that discussions were continuing about whether the panel system should continue to operate from the start of the new financial year in April.

"We do need to retain some kind of control in the future," said Dr Geddes.

He said the panel system had existed before the suspension of some procedures and the board heard that decisions on referrals were now made in five working days, compared with a year ago when some patients were waiting months.

Dr Geddes said GPs appeared to be referring fewer patients in cases where they knew treatment had been suspended, a view supported by PCT director of performance and delivery Bill Redlin, who said the prior approval panel had had a "major impact".

"All hospitals are saying referrals are well down," said Mr Redlin, although official figures are not yet available.

The board also heard the current deficit forecast at the year end was £38m, although the PCT's director of finance and resources, Nick Steele, insisted it was on track to reach its target of a £35m shortfall.

Members of the public who attended were angry not to be able to raise questions directly with the board at the meeting but chairman Johnny Wardle said accepting written questions in advance had been introduced to make the board more accessible.

The next board meeting is in York on March 30.