Changes to the way cancer services are funded could damage attempts to end postcode subscribing, MPs have warned.

A report published on Wednesday by the all party parliamentary group on cancer said many local funding agencies were "struggling" with the latest reforms.

The changes, introduced at the start of this year, allow primary care trusts (PCTs) to take the lead in funding cancer services.

But the cross-party group of MPs warned that a lack of experience and managerial skill at local level is hampering the delivery of services.

They identified delay sin diagnosis and treatment and difficulties with the purchase of drugs and equipment.

The new system should be scrapped, said the committee, with power handed over to England's 34 cancer networks.

"We believe that individual PCTs are too small to commission specialist, high cost cancer services effectively, and that they lack the expertise to do so," said the report.

Local variations were leading to a postcode lottery in cancer services, it added.

Dr Ian Gibson, chairman of the group, said there was a "serious problem" with the existing system.

"The government rightly says that cancer is a national priority, yet the system that's expected to deliver it is too fragmented," he warned.

"PCTs are struggling to cope and lack experience in commissioning cancer services.

"The budget for cancer services must therefore go directly to cancer networks to allow them to plan for sustained improvements in cancer care."

Responding to the attack, the Department of Health insisted that local strategic health authorities and PCTs were "best placed to respond to local needs".

"We have the fastest falling death rates for lung cancer in men and breast cancer in women in Europe," said a spokesman.

"We are delivering better treatment, more quickly to more people than ever before with unprecedented investment - an extra £570 million in 2003/04 alone."

But Professor John Toy of Cancer Research UK said that successful treatment depends on early diagnosis and expert treatment.

"It is not acceptable in today's NHS that any of these parameters are determined by a person's home address," he said.

"The government must respond urgently to address the issues in this report."

And Liberal Democrat health spokesman Paul Burstow warned that the government has "set more national targets than local health trusts can fund".

"The inevitable conflict between national priorities not only causes difficulties for cancer patients, it causes difficulties for any patient who is not deemed a priority," he said.

"It is worrying that we still do not have all the information on how long all patients are waiting for cancer diagnosis and treatment.

"Ministers are happy to publish statistics on cancer treatment where they are meeting their targets, but have failed to publish most waiting times."