Tony Blair has today refused to apologise for health secretary Patricia Hewitt's remark that the NHS is having "the best year ever".
He was speaking after the acting NHS chief executive warned entire hospitals could be closed down because of the £521 million deficit facing the health service this year.
Ian Curruthers, who took over from Nigel Crisp at the top job in March, said trusts could cut accident and emergency services and concentrate on specialist services such as orthopaedics and cancer care in an effort to balance their books.
He also warned that more drastic action was possible, telling The Guardian: "I can think of very few instances where we are talking about closing whole hospitals. You never say never, but I can think of very few where that would be the case."
Many people believe the pace of the government's reform of the health service is to blame for the deficits, which are leading to job cuts in health trusts across the country.
And in the Commons today, Conservative leader David Cameron questioned how the government was going to ensure that "crisis cuts to budget deficits don't do long-term damage to the NHS".
"These cuts are happening right across the NHS and are profoundly affecting services across the country. Will the prime minister take this opportunity to apologise for the crass insensitivity of [Ms Hewitt's] remark?" he asked.
But Mr Blair rejected the suggestion that any apology was needed, saying the "so-called job losses are often posts not being filled, or agency staff not being hired" - and adding he would not take criticism from a man who voted against extra NHS investment.
Speaking at a conference of health managers in Birmingham an hour later, head of the NHS Confederation Gill Morgan backed the government reforms as necessary to lead to "safer, quicker and more effective treatment" and a "more productive NHS".
But she said the past year had been "turbulent and distressing" for many working in the NHS, in part because of confusion about what the government was trying to do.
Ministers "lack the compelling vision to tell us where we are going and why", resulting in a string of directives implemented "one on top of another, that are often contradictory", she said.
The next two years would be "among the most challenging we have ever had to face", Dr Morgan told delegates, but this could be made easier if government gave local NHS leaders the autonomy to ensure they introduce reforms from the bottom up.
"This is a malign culture which will prevent us improving the service for patients as we become too concerned with what we report rather than what we deliver. The bruising last year has led to a major breakdown in trust and damage to morale," she said.
"We need increased local autonomy because that is the strongest driver for change, meeting financial balance and delivering patient safety.The centre has the responsibility to create the environment, the tone and behaviours to allow the service to reform from the bottom up."