The Secretary of State for Health rejected calls for more money by doctors who are overspent on their drugs budgets after an unexpected rise in the cost of `generic' unbranded drugs.
"We will be looking to local organisations around the hospitals, primary care groups and social services departments to deliver what they promised, which is the NHS open for business as usual throughout the winter, and in particular over this extended period," he said.
Mr Milburn, in his first major interview since becoming Secretary of State for Health, said he had asked the Office of Fair Trading to investigate the drug companies' price rises, but that there would be no extra cash this Christmas.
His predecessor, Frank Dobson, eased the NHS crisis over Christmas with more money in two previous years, but Mr Milburn insisted that the extra cash to meet winter pressures was already in the system after the comprehensive spending review.
"This is the first year of the extra money coming on line. In the first two years of course there was extra money for the NHS. A good chunk of it was for winter preparations because we were working on Conservative spending plans.
"The reason that this year there will not be an extra winter allocation is because we have incorporated the winter pressures within the extra resources that are going in from April this year. I know there will probably still be people within the NHS who think there is going to be a last-minute announcement on this, and there isn't going to be one."
Mr Milburn is now bidding for extra money for the NHS in the long-term review of public spending for 2001-4, which he started as the former Chief Secretary to the Treasury under Gordon Brown.
It could deliver a big increase in health spending on the eve of the next general election, if Mr Blair opts to go to the polls early. Mr Milburn said the review was unlikely to lead to new charges on the NHS, but he hinted that it would look at the anomalies over prescription charges that were ducked in the last Comprehensive Spending Review.
"We have just started the review. Last time round the review looked at everything from base zero. My suspicion is it might be a more structured approach than last time."
"It may have a look at prescriptions. It's too early to say."
He is adamant that the Tories have made a fatal mistake in arguing that taxation alone can no longer support growth in health spending in Britain. He rejects their policy of encouraging more people to take out private health insurance. But in committing Britain to a tax-based health-care system, Mr Milburn insists the NHS must modernise to meet demands.
"We want to see sustainable funding for the NHS. What I want to do for this ten-year period is to demonstrate that the NHS is getting better and that it is changing to meet patients' needs. That means providing more money. This CSR does that.
"As we invest, we have got to get a dividend back from the NHS in terms of change. This is not just money to keep the show on the road. It is money to modernise the services.
"We are living in a consumer society where people rightly expect fast access to services, and the NHS has to change to adapt."
Having switched the emphasis away from the total number of patients on waiting lists, which dogged Mr Dobson, he wants to focus on reducing waiting times for treatment.
"There is a foundation laid. Where we want to get to - it's a ten-year programme for change - is an NHS that offers people a faster, more convenient treatment where we embrace new technology so that people can book their appointment at the hospital, they know they can get their diagnostic tests back on the same day, their discharge arrangements will be organised in advance. The problem is now they not only wait to get into hospital; they wait to get out as well.
"We will embrace the Internet to allow people what they want."
He is concerned by the cash-back offer by one private health insurance scheme for customers who use the NHS. "I am more concerned about where the Conservative Party has moved to on these issues. For 50 years there was a post-war consensus on health. I think it is at an end. Today's Conservative Party believes the only way you improve health in this country is by getting more and more people to go to the private sector.
"Liam Fox's speech at the Conservative Party fringe was a seminal moment. That is the big dividing line on health between the Conservative Party that says the NHS has to be privatised and the Labour Party that says the NHS has to be modernised."