The Government will allow all NHS hospitals to take over their private wings in the latest attempt to cut waiting lists.

Alan Milburn, the Health Secretary, will approve the "nationalisation" of the 3,000 beds offered by the health service to private patients. The buy-out plan means that NHS hospitals could seize control of private units managed on their sites by firms such as Bupa.

The extra capacity would be used to ease the strain on the service and end the long-held perception that those who pay privately can jump the queue for treatment. Many of the private beds and private-patient units on NHS sites are under-used and offer little value for money for the firms that run them.

The plan has been drawn up by the Department of Health after the success of the £27m takeover of the private London Heart Hospital last summer.

Some 120,000 operations were performed last year in private units, but the number is in decline and many private health care companies are keen to offload them. The rising number of nurses in the state sector has also made the move possible.

Although the pay beds raise some £300m a year for the NHS, Mr Milburn believes that buy-outs would be very effective as long as local NHS trusts balanced their books and absorbed the loss of private income. Mr Milburn said that it was "perfectly reasonable" for trusts to convert private-sector units to create extra capacity.

Officials at the Department of Health were impressed by an experiment in Warrington, near Liverpool, last year, in which an NHS hospital bought the private orthopaedic unit located on its site at a knock-down price.

To give local hospitals an incentive, the Government is planning to take over two more private hospitals for £3bn. Mr Milburn is negotiating, in particular, to buy or lease hospitals in London, where waiting lists are the longest. The move is part of a drive to reach the Government's target for no patient to wait more than three months for treatment by 2008.

Figures published yesterday showed that the number of patients waiting to be admitted to NHS hospitals in England rose by 10,100 (1 per cent) between November 2000 and November last year. However, the number on the waiting list fell by 0.2 per cent between the end of October and the end of November last year, when it stood at 1,031,300. The number of English residents who had been waiting more than a year in November had dropped by 17 per cent since October, to 33,000, and was 31 per cent lower than in November 2000, when the total was 47,800.

Last year, the Government said it was taking over the Redwood Bupa hospital in Surrey to clear an extra 5,000 patients a year and bought out the heart hospital in August. The plans are part of the Government's strategy of proving that it will work with the private sector where necessary but will also take over in some areas.

Mr Milburn unveiled plans for a number of new projects to work with commercial firms this week. The Health Secretary rejected criticism from Labour MPs and trade unions and announced a set of public-private partnerships to provide NHS pathology services and to rebuild GPs' surgeries.

"Where we can use private-sector capacity to improve care for NHS patients, that is what we will do," Mr Milburn said.