Update The chancellor Alistair Darling this weekend appeared to signal the pre-Budget report will include some major cuts to the £12.7bn NHS National Programme for IT (NPfIT).
The hints, dropped in an interview on the Andrew Marr Show yesterday, have already drawn protests from doctors.
Darling said: "I'm not doing a spending review just now. But I do think it is necessary for me on Wednesday to indicate areas where we are going to cut spending, or where we're not going to spend as much as we were.
"For example, the NHS had a quite expensive IT system that, frankly, isn't essential to the frontline. It's something that I think we don't need to go ahead with just now. But I will be setting out a clear direction of travel because it's important that we do that."
His statement prompted speculation that the entire NPfIT - which has been dogged by delays and overspending - could be scrapped, but the Treasury has since indicated the cuts are likely to be more limited.
It's unclear which particular contracts or features will be targeted. Large parts of the NPfIT are already implemented or being built, and the picture is different for different regions. A Treasury spokesman wasn't immediately available to comment.
The British Medical association, which represents doctors, said the government's claim the technology wasn't needed on the front line was wrong.
"It's ridiculous for Alistair Darling to say 'it isn't needed, it isn't frontline' - it is," Dr Grant Ingrams said in a TV interview.
"The way [the NPfIT] was procured years ago was wrong and could have been done better... but now it's getting to the point where it's going to be rolled out soon I think [cutting back] is short sighted, I think it's going to waste money."
Any attempts by Ministers to break contracts could prove costly. Fujitsu, which left the project last year after a dispute over terms, is currently in negotiations on its £700m compensation claim.
The Conservatives sought political capital from Darling's comments, branding it a "U-turn". They plan to ditch the centralised system and allow local NHS Trusts to run their own IT procurement processes. ®
Health secretary Andy Burnham told the commons today that the planned cuts would amount to £600m over the lifetime of the project, but insisted that the NHS "could not function" without the benighted IT scheme.
Answering an urgent question on the scheme, he said the revamped plant would "pare back the programme to the core elements."
Nevertheless, the BBC reports, Burnham insisted it was a "myth" to say the scheme had been "a waste".