The Lib Dems yesterday called for a moratorium on all new NHS PFI projects until a full review of the system has been held.

The vote was effectively a defeat for Charles Kennedy after a motion setting out his own policy, which is to lay down conditions for private sector involvement, was then passed with the amendment added.

The Lib Dems also heard a speech from the CBI chief, Digby Jones, in which he urged Britain to adopt a "business as usual" approach in order to prevent the country talking itself into a slump.