The instructions to the management executive's business plan, a copy of which has been obtained by the Independent, appear to contradict Mrs Bottomley's rejection of explicit rationing in a speech in March to the British Medical Association.
The plan says the Secretary of State has ordered the executive to conduct a 'fundamental review of health expenditure to distinguish clearly between the essential costs of high priority spending, which will continue to be funded, and avoidable spending which cannot be afforded.
'With a focus on the medium to longer term, identify areas where better targeting can be achieved or from which the public sector might withdraw.'
The plan, which was placed in the House of Commons library at the end of last week, took Opposition leaders by surprise. David Blunkett, the Labour spokesman on health, said: 'This is very significant. If this direction is followed, it will lead to a residual NHS, a two-tier service and the abandonment of responsibility by the Department of Health for key areas of treatment and care.'
Mrs Bottomley used her speech to the BMA to signal her opposition to the idea, developed in Oregon in the United States, for limiting health costs by drawing a line between the items which would be available on the NHS, and those which would not.
A spokesman for the Department of Health denied that it contradicted Mrs Bottomley's speech to the BMA, in which she said that each level of the NHS had its own role to play in priority setting.
'The role of the Government is to take strategic decisions, but it is not the best level at which to take decisions on the clinical priority of individual patients. These decisions must be based on local knowledge,' he said.
The plan does not suggest what items may no longer be available on the NHS, although there has been continuing pressure for the NHS to end cover for tattoo removal, benign 'lumps and bumps' such as warts, and non-life-threatening operations, such as cosmetic surgery and some procedures on varicose veins. Mr Blunkett said it was part of the Government's hidden agenda for switching more patients to private care.
A leaked internal memorandum shows that the social security ministers, who spent the weekend reviewing the future of the welfare state, are preparing to tax invalidity benefit from next April, according to Gordon Brown, the shadow Chancellor.
The memorandum by social security officials says ministers 'can see the attraction of bringing the benefit into tax' and the officials say they 'understand current thinking is for implementation from April 1994'.
Taxing the benefit was among options considered by a seminar of ministers at Chevening in Kent. They also discussed plans for tightening the rules for receipt of invalidity benefit; raising the women's retirement age from 60 to 65 years; and long- term proposals to means-test state pensions and child benefit.