The Department of Health has been warned that planned efficiency savings "may not be achievable", leading to higher hospital waiting times unless the NHS receives a fresh injection of government cash, according to a leaked Whitehall document.
The Guardian reported that a letter from the independent Challenge group – set up as part of the Government's spending review process – said the department could be left with an "unpalatable" choice between cuts to services or seeking extra funding.
The Department of Health said that the letter – sent in September, before the Government had completed its spending review – was outdated and that the issues raised had been dealt with.
But Labour said that it showed that Health Secretary Andrew Lansley was running a "rogue department" and urged Mr Cameron to intervene to get it back on track.
The letter, sent to Treasury Chief Secretary Danny Alexander, questions whether promised quality, innovation, productivity and prevention (QIPP) will achieve efficiency savings, as well as raising concerns about the cost of the switchover to the Government's flagship policy of GP commissioning.
"Taken together, the NHS could therefore face a significant budget shortfall by the end of the SP (spending) period. The NHS typically deals with such shortfalls by limiting treatments, leading to increased waiting times," it said.
"The Government will be faced with a choice between dealing with the fallout from increased waiting times or increasing the DH's budget, perhaps by as much as 10bn per year. To avoid this unpalatable trade-off, the DH settlement needs to build in much greater non-QIPP efficiency savings from the outset."
The letter was written on September 7 by the former APAX chief investment officer Adrian Beecroft, the chief executive of the Legal Services Commission, Carolyn Downs, and the director of climate change adaptation at the Department of Energy and Climate Change, Robin Mortimer.
A Department of Health spokesman said the concerns raised in the letter were no longer relevant.
"This letter was part of the process of independent challenge in the spending review," the spokesman said.
"The work has now concluded and the letter is therefore out of date – it has been overtaken by publication of the response to the White Paper consultation and primary care trust allocations for next year. As a result of the Government's decision to protect the NHS it will receive increased resources next year – an extra 2.7bn.
However, Shadow Health Secretary John Healey said the letter underlined the inherent risks in Mr Lansley's plans to reorganise the NHS based on GP commissioning.