The Health Service spends £40m a year on suspending doctors, nurses and other staff who have often done nothing wrong, an inquiry has found.

Hospitals and trusts suspended clinical workers too quickly, then took months and sometimes years to resolve complaints, the National Audit Office (NAO) reported yesterday. Some doctors had been left in limbo for up to four years before being cleared.

Sir John Bourn, head of the NAO, said: "Where patient safety is considered to be at risk or there are allegations of misconduct, it is vitally important for NHS trusts to be able to exclude clinical staff from work or restrict their activities so that the situation can be thoroughly and promptly investigated.

"At present, however, there is evidence of many cases of exclusion being allowed to drift in without proper resolution or proper management. This represents a serious waste of resources for the NHS and can harm the career and even personal well-being of the accused clinicians themselves."

The NAO study found that between April 2001 and July 2002, more than 1,000 clinical staff were suspended by trusts. More than 500 were nurses, 200 were doctors and the remainder were other workers such as radiographers, pharmacists, psychologists and paramedics. Doctors were suspended for an average of 47 weeks, at a cost of £188,000 each in pay and the bills for providing a locum replacement.

The NAO said that if suspensions were kept to an average of 24 weeks, the health service would save £14m a year. Department of Health rules state that doctors and other staff should only be suspended in cases of professional competence, where patients could be at risk. But the NAO report found that some trusts were suspending doctors over problems such as personality clashes. Four out of ten doctors eventually return to work, with only 24 per cent sacked because of an investigation.

The NHS also loses doctors who may have become disillusioned or so distressed by the suspension that they decide to quit their jobs, even if they are cleared. One in three doctors opts to resign or retire at the end of an investigation.

Professor Sir Liam Donaldson, the chief medical officer, said: "The DoH has always believed that patient safety is paramount, and I am pleased to see that the report recognises this.

"It would be a dereliction of duty to allow doctors to practise where serious concerns about patient safety had been raised just in case the allegation against them were false. The annual cost of suspensions is a fraction of the NHS payroll, and is the price we have had to pay to ensure patient safety."

He admitted: "There is scope to reduce this cost by ensuring that suspension is used sparingly and for the minimum length of time, and the National Clinical Assessment Authority is showing NHS trusts how this can be done."