Lord chancellor Lord Falconer has scrapped plans to get rid of legal aid for medical negligence cases because it would cost the NHS too much, according to documents seen by the Guardian.

It is believed it would cost the NHS £4.70 for every pound saved not using the funding system.

Last July a consultation paper floated plans to restrict legal aid to only the investigation stage of such cases, leaving lawyers to take them forward on a no-win, no-fee basis.

But the idea was dropped from a package of reforms unveiled on Wednesday to limit public spending on civil legal aid.