The Prime Minister has thrown down five challenges to doctors, nurses and others working in the National Health Service to improve the care they offered to the people.

He told the Commons that, on the back of the major cash injection which Chancellor Gordon Brown announced for the NHS, the service had to embrace modernisation.

"A step-change in resources must mean a step-change in reform," he told a crowded House the day after Mr Brown announced a £2 billion cash boost for the NHS this year.

The Prime Minister said he was setting the service five challenges.

The partnership challenge required all parts of the NHS to work together to end bed blocking, reduce unnecessary hospital admissions and provide the right level of beds and services for each level of care.

Mr Blair, defining the performance challenge as ensuring all units come up to the standards of the best, said Health Secretary Alan Milburn would today give details of £660 million to be allocated straight away to health authorities and trusts.

A new ministerial committee to be chaired by the Prime Minister will over-see progress towards meeting those challenges, Mr Blair told MPs.

It will publish a "four-year action plan" in July on what had to improve, how it would be done and the timetable in which change had to take place.

The other three challenges were defined by Mr Blair as the challenge for the professions, the patient care challenge and the challenge on prevention.

Mr Blair said: "I say to the hardworking and dedicated staff in the NHS - make sure the NHS confronts the hard necessities of reform to improve the value we get for the money we spend."

The Prime Minister said the challenge for the professions was to strip out unnecessary demarcations and introduce more flexible working practices.

The patient care challenge was for units to modernise to ensure that the most serious conditions were treated quickly and no one had to wait too long for an operation.

The challenge on prevention was to balance spending on treating illness with tackling the causes of ill health.

The Prime Minister said that in July the Government would publish a detailed four-year action plan for the NHS - what he called the "timetable for delivery".

He told the Commons: "I do not, I will not, yield to those who believe the NHS has had its day. It has not. A modernised NHS, not private medical insurance, is the future."