Tony Blair misled the House of Commons last week by overstating the Government's extra spending on the NHS by nearly £14bn.
The Prime Minister told MPs on Wednesday that extra commitments outlined by the Chancellor in the Budget would mean that money for the health service would rise to £82.5bn. But that figure included estimated spending on private health care.
The error is particularly embarrassing for the Government since it has come under pressure to improve the health service after the winter flu crisis resulted in cancelled operations and a shortage of beds. Private medicine is still anathema to many traditional Labour supporters.
The Prime Minister told the Commons that "by 2003-04, NHS spending will have risen to 7.6 per cent of gross domestic product [GDP]." But the real figure is 6.3 per cent or £68.7bn according to the Treasury's statistical bible, the Red Book. Mr Blair's figure includes spending on private health care, bringing the total to £82.5bn.
Dr Liam Fox, the shadow secretary of state for health, accused the Prime Minister of "lying". "For this Government there appears to be no such thing as truth," he said. "They will distort any figure to make the argument they want."
A Downing Street spokesman admitted the statement could have been worded better but claimed "no one could have been in any doubt about what he meant."
But a health service finance expert said that, because it was not obvious that the prime minister was referring to NHS and private spending, it would have confused people. "It was the NHS that was struggling over the winter, not the private sector," said Tom Jones, the health spokesman at the Association of Chartered Certificated Accountants.
Mr Blair has promised to match European levels on spending, which are currently 8.9 per cent of GDP. But "what the Government should be worrying about is that they are still nowhere near the EU average, even when private spending is added", Mr Jones said.
The discrepancy was spotted by Keith Marsden, a World Bank economist. "The Government isn't really being straightforward," he said. "Blair's pledge was for NHS spending to match EU levels, not NHS spending and private spending. The figures he is quoting is for total health care spending in the UK, not NHS spending."
Dr Fox said: "This was a written statement given to the House of Commons. It means you can tell lies in the House of Commons as long as you're the Prime Minister." Under the code of conduct for ministers, those who mislead the Commons, intentionally or otherwise, must return to correct the mistake.
A Downing Street spokesman said: "It is well known for the purposes of international comparison you always include private health care.
"The Prime Minister's statement is referring to the rise in NHS spending which is bringing UK spending up to 7.6 per cent of GDP. If it was 7.6 per cent on NHS spending alone then the total health spend would have been 8.6 per cent, way above EU average, which we would have called attention to."