Frank Dobson, the Secretary of State for Health, will introduce a Bill in the new session of parliament which will force insurers to pay for the hospital treatment of people injured in car accidents.
A team of collection agents, to be based in Newcastle upon Tyne, will be authorised to collect up to pounds 10,000 for each accident victim treated by the NHS.
Insurers covering the car at fault in a crash will have to pay pounds 350 if the victim is treated as an outpatient and more than pounds 400 a day if the victim is admitted to a ward.
The money collected from insurers could pay for two medium-sized hospitals to be built, or 3, 333 heart transplants.
The announcement is likely to be made in the Queen's Speech, which sets out the Government's legislative programme for the coming year.
The move follows several months of discussions and behind-the-scenes work by civil servants and Labour MPs.
"This will be legally enforceable. It will raise around pounds 100m," said a source close to the Government.
"There will be a centrally-based hit squad, added to the compensation and recovery unit which works out of the Benefits Agency in Newcastle. They will collect the money and then pay it to hospitals."
Insurers say that the policy will lead to higher charges for motorists. Vehicle owners pay pounds 6bn a year in insurance premiums which cover the cost of accidents and damage to cars.
"If we have to pay more out, this will clearly affect premiums," said a spokesman for the Association of British Insurers.
In the past, only pounds 10m a year has been collected from insurers to cover hospital costs because no centralised system has existed. Under current rules, hospitals are allowed to collect only pounds 3,000 per case, even if the road victim spends months in intensive care.
"The NHS has been losing millions and millions of pounds, because the system has made it too complicated for hospitals to claim money back," said Phil Hope, MP for Corby.
"By creating a central system, the Government can bring in as much as pounds 2m a week for the NHS. It is worth huge amounts of money. The only accidents it will not cover are those involving cars that are driven illegally."
Britain has the safest roads in Europe. You are 3.5 times more likely to be killed in Portugal in a car crash than in Britain. In 1995, the latest year for which Europe-wide accident statistics are available, 3,772 people were killed in traffic accidents in the UK.Reuse content