The number of companies in the bidding process for a slice of the £2.3 billion IT budget has been cut to 11.

Three of the firms - BT Group, IBM Global Services and Lockheed Martin - are now in a three-way race to oversee the creation of an online repository of information about every NHS patient in England. These three companies, plus the other eight, will also compete for the contracts to modernise and standardise systems across one of five geographical regions.

The NHS contract comes amid an unprecedented downturn in corporate spending on IT. It is seen by many of the companies involved as being one of the most lucrative contracts on the market. Richard Granger, the man who has the task of implementing the scheme, said that the final decision on the contracts would be announced shortly.

The decision on which of the 11 companies, whittled down from 31, will enter the final round of bidding comes at a time when concern is growing that the computerisation of large parts of the NHS could descend into chaos. The National Audit Office (NAO) has announced that it will review the scheme. The move is unusual as normally the NAO only begins investigations once such projects have been implemented.