The Cabinet is expected to endorse higher spending on health, the police and schools, at the expense of cuts in road building, housing, national heritage and other programmes, although it is likely to require a further meeting on Thursday to settle the figures.
As Mr Dorrell made his 11th-hour bid for more money for the NHS in the run-up to the election, further evidence emerged of the crisis facing the NHS this winter.
The National Association of Health Authorities and Trusts estimated English hospitals needed a minimum of pounds 200m - less than 1 per cent of total NHS spending - to see them through to the end of the financial year in March. The NHS Trust Federation said that to avoid extending waiting lists and delaying non-urgent surgery such as hip replacements and varicose-vein treatments, some pounds 300m extra was needed.
Mr Dorrell will face Commons questions today over the extent of the crisis. Simon Hughes, the Liberal Democrat spokesman, said the NHS faced the biggest squeeze since the Seventies.
But as John Major prepared to chair today's Cabinet, he was accused of fiddling the figures to keep his election pledge to spend more in real terms on the NHS every year.
Draft figures handed by the Department of Health to the Commons Select Committee on Health were changed to show growth in spending on health and personal services of 0.1 per cent instead of a cut of 0.3 per cent.
Chris Smith, shadow heath secretary, said: "The select committee's figures appear to have changed between the draft and publication. That may be convenient for the Government but it cannot hide the reality: that the funding allocation for health and social services for the current years is no real increase at all and that this is the source of the impending crisis we face this winter."
The Government's claims to be spending more on the NHS have jarred with the daily experience of hospitals struggling to make ends meet. Only last month at the Tory party conference, Mr Major renewed his manifesto commitment to increase spending in real terms every year on the NHS.
However, a close study of the figures shows that it was achieved - and the Government's pledge on NHS spending upheld - by statistical sleight of hand. The Department of Health told the Commons committee the forecast out-turn for 1995-6 would be pounds 34.5bn. When set against the pounds 35.4bn in the planned total for 1996-7, it meant in real terms, taking into account inflation in the NHS, there would be a fall of 0.3 per cent this year.
But when the figures were published, the forecast out-turn for 1995-6 had been reduced to pounds 34.4bn.That enabled the Government to show that total spending on health and personal services would grow in real terms by 0.1 per cent.
The change was spotted by Hugh Bayley, a Labour member of the committee and an expert on health economics. Mr Bayley said: "I would say that the real-terms increase is just not being met this year. It looks as though they are fiddling the figures. They have not added an extra penny but they have shown growth by reducing the figures for the previous year."
But Labour's attack could be blunted by the refusal of the shadow Chancellor, Gordon Brown, to allow Labour to match the Tory commitment for real-terms growth in health spending.
"We will judge the Budget when we see it but what is absolutely clear is that the drift in the Conservative Party has become such that nobody believes that this is a Budget for the country," he said. "It is going to be a Budget for the Conservative Party."
Longer waiting lists, page 2
"For over 17 years, through thick and thin, we Conservatives have found extra money for the NHS. It's become a habit. So today I give you a health service guarantee. Our manifesto will pledge that the NHS will get more over and above inflation, year...on year...on year...on year...on year... for the five years of the next Conservative Government." John Major, Conservative Party conference, 11 October 1996
"Anyone who has actually run one or more of the big Departments of State knows how unacceptable it would be to contemplate cuts in the health service, in our education system, or in the resources needed to improve law and order.
In a modern and civilised society, no one can regard all public spending as a bad thing." Kenneth Clarke, House of Commons, 30 November 1993.Reuse content