Figures from the Department of Health show that 1.2 million outpatients a year either do not turn up when they are expected, or cancel less than 24 hours beforehand when it is too late to fill the vacancy.
The figure represents more than 13 per cent of all outpatients who are given appointments. Hospitals and health trusts calculate that each cancellation costs a minimum of pounds 50 in staff time and administration.
"This is a conservative calculation and the real cost is probably much higher," said Barbara Connah of the National Association of Health Authorities and Trusts, which is compiling a dossier on the problem.
"Thousands of other people who would have liked to fill the vacancies are left sitting at home when they might have been receiving medical attention. It is sheer bad manners on the part of the patients responsible.
"Some people are simply not confident with the system or are frightened to tell the hospitals that they cannot get there, and health authorities are examining a number of measures to try and solve the problem."
One hospital that has redesigned its appointments cards and set up a special 24-hour cancellation hotline is the Worcester Royal Infirmary, Britain's oldest general hospital.
A recent survey revealed that more than 15,000 outpatients failed to keep appointments during 1996 - an increase of over 21 per cent on the previous year. The cost to the hospital was more than pounds 750,000.
The hospital has launched a poster campaign to try to persuade outpatients not to ignore their appointments, but officials say the trend is still increasing.
"It's frustrating because, although our nurses are skilled, they cannot use those skills when the patients do not turn up," said a spokesperson.
"We are doing all we can to make it easier for patients to let us know of cancellations in good time, but at the end of the day they have to take responsibility for themselves. It is not fair on the other patients."