By Ian Dunt
Nick Clegg finally broke ranks on NHS reform last night, in a significant development which distances him from David Cameron.
In a major concession which cuts the heart from the government's NHS reform and implicitly criticises his coalition allies, Mr Clegg promised to strip the plans of enforced competition provisions.
Speaking to Liberal Democrat peers and MPs yesterday evening, the deputy prime minister said Monitor, the body which was being turned into a competition watchdog, would instead have a duty to push NHS 'collaboration'.
Such a move would calm many of the jitters from opponents of the bill, who fear the reforms are an attempt to privatise the NHS.
Plans to open up the NHS to private companies had become political explosive after comments from No 10 health adviser Mark Britnell, who said the NHS would be shown "no mercy" and promised private firms they could "take advantage" of the reforms.
Mr Clegg told peers and MPs: "People get confused when one day they hear politicians declare how much they love the NHS and the next they hear people describing themselves as government advisers saying that reform is a huge opportunity for big profits for health care corporations.
"There must be no change in the way competition law operates in our NHS. No to establishing Monitor as an economic regulator as if health care was just like electricity or the telephone and no to giving anyone in the NHS a duty to promote competition above all else."
Removing the element of competition from the bill would see the heart of the legislation torn out. The only significant element left would be the formation of GPs' consortia which, while controversial, does not raise the same sort of passion in opponents.
Tories were trying to talk down the development this morning.
"The deputy prime minister met, I understand, with his members of parliament last night and discussed this," Conservative junior health minister Simon Burns told the Today programme.
"They have come up with some ideas, like a load of other people throughout the NHS. All these ideas will be considered when the listening process is over and then decisions will be taken."
But former Lib Dem MP Evan Harris, who has carved out a post-election career as a significant voice on the left of the party, said the development constituted a veto.
"We have made very clear that there will be no government majority for things not in the coalition agreement, like this mass marketisation of the health service, without Liberal Democrat MPs and peers," he said.
"They will not vote for Monitor to be an economic regulator, so this is a veto."
John Healey, shadow health secretary, was unconvinced by the deputy prime minister's conversion.
"People can't trust Nick Clegg with the NHS. He only wants to save his party," he said.
"For the past 12 months, the deputy prime minister has backed the Tory changes to the hilt and Lib Dem MPs have voted for it at every stage in parliament.
"It's only since his Party's disastrous showing at the local elections that Mr Clegg has started back-peddling. He's now trying to do a u-turn over the Health Bill while in fact up to his neck in it."
The development is likely to be seen as a rebuff to the prime minister, whose speech on Monday proclaiming his love for the health service saw him try and take leadership on the issue. It will also mark out a new humiliation for Andrew Lansley, the beleaguered health secretary, who has been thoroughly sidelined.
Other parliamentary observers are more suspicious, with some suggesting the last two weeks' developments may be an act of political theatre, with Mr Clegg and Mr Cameron arranging a public disagreement ending in a Lib Dem victory to improve the party's reputation.