The health service will continue to receive a rising share of government funding, Gordon Brown has pledged.

As expected, the NHS has emerged as one of the big winners from the 2004 spending review.

The chancellor confirmed that the NHS will see its budgets rise by 7.2 per cent a year above inflation until 2007/08.

Social services will receive 2.7 per cent increases above inflation for the three years up to 2007/08 to support more older people to live in their own homes.

"This historic increase in resources allows us to maintain an NHS – the best insurance policy in the world – free at the point of use, but increasingly personal and responsive to the needs of individual patients," said the health secretary.

John Reid also pledged that the funding would allow the implementation of the government's choice agenda.

"By 2008, the maximum wait for hospital treatment will have fallen from 18 months to 18 weeks and patients will have more choice and control over their care than ever before," he said.

The spending plan will see more frontline staff and more capacity, said the government.

And there will be also be a "war on waste", releasing around £6.5 billion for better patient care by 2007/08.