Alan Milburn, the Secretary of State for Health, will this week demand a "new Beveridge plan" to reinvent the NHS which will include greater use of the private sector to fill gaps in the service.

On Wednesday, Mr Milburn will set up seven teams to produce a blueprint for the sweeping reforms promised by Tony Blair after announcements in last month's Budget that health spending would rise by 50 per cent over the next four years.

Mr Milburn told The Independent yesterday: "What counts is what works - that is the bottom line." Hinting that more of the NHS budget would be spent in the private sector, he said: "If private half-way care for elderly patients currently taking up [NHS] beds works for the patient, the hospitals and the taxpayer then we'll do it."

He added: "I'm a pragmatist. As long as the ideals and the standards of the NHS are maintained, I don't care who gets involved or how we do it - but we do have to revolutionise and modernise the NHS. People have to understand this opportunity will not return and if we fail, the public's confidence in the NHS will rightly plummet."

Mr Milburn admitted: "I would like to go down as the 21st century's Beveridge, the man who revolutionised the NHS, but that's not why I am doing this."

In the past, the complaint was that there was not enough money to modernise, he said. But last week he wrote off the service's debt and this month "more money than the NHS has ever seen will start flowing into the coffers of hospitals and trusts".

The review teams, each headed by a minister, will look into "the five Ps": partnership; performance and productivity; the professions; patient care (empowerment and speed of access); and prevention.

"The plans these teams come up with have to be as fundamental as the Beveridge report in laying the foundations for the NHS. Beveridge laid the foundations for the first 50 years; this plan will have to be the foundation stone for the next 50 years," Mr Milburn said.

He believed that the mood in the NHS was to "seize the opportunity", but he warned that some professional taboos would have to be broken. "If consultants are overworked then they should be happy when we suggest nurses take over some of their duties. It is ridiculous that patients in accident and emergency wards have to wait for hours for a nurse to get a signature from a junior doctor on blood tests before they can go."

Mr Milburn demanded a cut in bureaucracy. "If Ayreshire and Arran Health Board can reduce the number of appointments needed to get a cataract operation from 20 to two then the rest of Britain can do it."

Yesterday, the Government rejected a call by Frank Field, the former minister for welfare reform, to save the NHS from collapse by sending patients to Third World countries where healthcare costs a fraction of that in Britain. He pointed out operations such as kidney transplants cost £500 in India compared with £8,490 in the United Kingdom. He said the disparity was such that patients could take a relative abroad with them and Britain could help the hosts by offering to pay for a free operation for a local person for each one it bought.

But the Health minister John Hutton dismissed the plan for an "NHS International" as unworkable. He said patients would want to be treated in Britain, and many would be too ill to travel abroad.