Doctors are making inappropriate decisions about treatment for millions of patients, putting lives at risk and wasting billions of pounds of NHS cash, the Government's chief medical officer said yesterday.

Outdated treatments are being used too much, while some newer ones are under-used, leading to "unacceptable variations" in care, Sir Liam Donaldson said.

A study in the US had suggested almost half of patients received inappropriate care and it was likely the same was true in the UK. "Very large sums of money" were at stake, Sir Liam said.

Launching his annual report, On the State of the Public Health, Sir Liam suggested changes to the tariff system for NHS hospitals could be used to incentivise some operations, and penalise others.

The National Institute for Health and Clinical Excellence is to be asked to advise on "disinvestment from established interventions that are of no proven value".

Sir Liam singled out tonsillectomies, hysterectomies, heart operations and prescribing of heart drugs as therapies where there was evidence of "inappropriate variations" resulting in waste or inequity.

Surgery to remove swollen tonsils is one of the commonest operations in England, with 50,000 procedures performed a year, half of them on children.

It used to be an operation favoured by the rich - 83 per cent of boys at Eton had had their tonsils removed in 1938 - but it has fallen out of favour and rates have declined. The operation has become commoner among the most deprived children. Sir Liam said 8,000 tonsillectomies could be avoided if all children were operated on at the same rate as the most affluent fifth.

Almost 38,000 hysterectomies are carried out each year on women aged 40 to 59, but new treatments have become available in the past decade which have led to a fall in the surgery rate of almost a third since 2002.

But the overall fall conceals wide regional variations. In north London the rate has dropped 64 per cent, compared with just 15 per cent in Northumberland, Tyne and Wear.

"We would avoid 6,000 operations and save £15m if the average rate of hysterectomy could be reduced to that in the fifth of the country with the lowest rates. In my view this level of clinical variation in practice is not acceptable," Sir Liam said.

"Ten million decisions are taken in the NHS every day. There are too many variations that cannot be explained by the needs of patients and that occur because of the habits of clinical decision makers."

Sir Liam also used his report to renew warnings of the threat of avian flu. He called for a national group to look at the ethics of who should get anti-viral drugs, vaccines and intensive care, if health services are overwhelmed in a pandemic.

Main points

* 8,000 fewer tonsillectomies and 6,000 fewer hysterectomies would be carried out if some regions reduced their rate closer to the national average.

* 1,200 more heart operations per million people needed in Greater Manchester and the north to meet targets.

* National Institute for Clinical Excellence should issue guidance on which treatments to drop.

* NHS should incentivise best treatments and penalise ineffective ones.

* Public health budgets must not be raided to solve NHS financial crisis.