An email from a top civil servant in the Department of Health has ordered officials to impose an "embargo" on new investment.

The note, sent last month from the office of the Chief Medical Officer, Sir Liam Donaldson, orders an "embargo on entering into new commitments". It threatens departmental officials with disciplinary action if they disobey the funding freeze.

The email, which was obtained by The Observer, is further evidence of a cash crisis in the NHS. It says the NHS finance director has "imposed an embargo on all programme staff... until further notice" and says that public announcements by ministers about further funding should be disregarded.

The leak will prove embarrassing to ministers as it suggests that the scale of the cash crisis in the NHS is worse than expected. It also raises questions about existing spending commitments.

A ministry spokesman responded: "The Department of Health is currently reviewing spending plans for the year against available resources. It still remains the department's intention to meet its existing commitments."