Tory leader David Cameron is scrapping the controversial Conservative policy of offering state-funded subsidies to patients who go private.

Under the 'patient passport' scheme, people opting to go private would have been entitled to a subsidy of half what it would have cost the NHS to treat them.

In a speech on Wednesday, Mr Cameron was announcing the policy would be dropped. And he was to 'reposition' Tory policy, insisting the NHS would remain free at the point of need under a Conservative government.

The new Tory leader promised to go further than Labour in reforming the NHS. But he explicitly rejected calls to move to a system based on medical insurance.

In a speech to the King's Fund health group in London, Mr Cameron was expected to say: 'Some people think that we Conservatives want to change the NHS into something that it isn't. Well, they're right. We do. We want to change the NHS into a more efficient, more effective and more patient-centred service. We want to change it into something of which we can be even more proud.'

'Other people - some of them in my own party - urge me to go much further. They want me to promise that under the Conservatives, the NHS will be transformed beyond recognition into a system based on medical insurance. I will never go down that route. Under a Conservative government, the NHS will remain free at the point of need and available to everyone, regardless of how much money they have in the bank.'

The so-called patients' passports came under relentless attack from Labour during the general election. Labour claimed such a move would cost the NHS £1.2 billion a year.