Health authorities across Britain are warning they will have to reduce their drug budgets, leading to rationing, to meet the pay rises of 4.7 per cent for most nurses.
The investigation threatens to reopen the row over rationing of drugs, including Viagra, the anti-impotence drug, and expensive treatments such as Beta Interferon to relieve the symptoms of multiple sclerosis.
Morecambe Bay Health Authority was making budget cuts to reduce a pounds 500,000 overspend on prescribing this year and warned it may cut deeper into the drug budget.
"We may even have to reduce the overspend by as much as 60 or 65 per cent,' said the health authority spokesman, Allan Muirhead.
In Manchester, the health authority is considering cuts in hospital services. A spokesman said: "This will have to come by not making investments in the waiting list initiative."
North West Anglia health authority was trying to save pounds 1.5m in GP prescribing and would have to save an additional pounds 1m to fund the pay rise.
In Wales, one health authority said the Welsh Office had allocated only 2.5 per cent extra for medical services. "It is going to be very difficult to maintain, develop or modernise services," said a spokesman for Bro Taf health authority.
Senior doctors in Gloucestershire said their local GPs' drugs budgets would be cut by 2 per cent, about pounds 1m, double the amount planned, because of the pay rises.
Ministers said claims in the survey by Pulse magazine would be investigated. But there was also ministerial anger at "shroud-waving" by health authorities to cause maximum embarrassment to the Government. "They have no reason to do this," said a senior ministerial source. "We provided enough for fair and affordable pay increases and the funds are there."
The Tory health spokesman, Ann Widdecombe, has challenged Frank Dobson, the Secretary of State for Health, to admit rationing is already going on. Her deputy, Alan Duncan, said: "The government lie machine has been rumbled. They are talking about big pay awards but they are squeezing health authorities to pay for them. Patient care is going to be hurt."