NHS trusts have been warned they could face intervention by the Health Secretary after a survey showed that pressure to save money has led to restrictions in access to non-urgent procedures.
Health Minister Simon Burns said rationing treatment on grounds of cost was "totally unacceptable" and decisions as to whether and when to treat patients should be on clinical grounds alone.
"It has got to be simply a clinical decision as to when a patient receives their treatment," he told ITV Daybreak.
"We have had the chief executive of the NHS David Nicholson, the medical director, writing to the trusts to tell them in no uncertain terms that the only criteria must be a clinical decision not a financial one.
"Ultimately if we find evidence that they are ignoring that, then the Secretary of State does have the powers to intervene."
"Unacceptable" says the minister - but are the government's practices behind the worsening service?
Mr Burns' remarks were made after a freedom of information request lodged by GP magazine showed that pressure to save money had left 90% of primary care trusts restricting procedures including hip, knee and cataract operations, weight-loss surgery and tonsillectomies.
The medical magazine said information released by 101 of the 151 primary care trusts showed nine in 10 had procedures to restrict GP referrals for procedures thought to be non-urgent or of low clinical value.
Limits on cataract surgery have been ordered in two-thirds of trusts, while six in 10 restricted weight-loss surgery and hip and knee operations.
These revelations follow an investigation by Radio 4's "File on Four" programme broadcast on Sunday, which showed how waiting times were being massaged by hospitals. The programme revealed how patients with chronic diseases were being thrown off waiting lists because their symptoms weren't acute enough.
Ministers insist that they oppose any practices which lead to patients being left untreated but refuse to vary the 18-week target from referral by a GP to being treated. This, coupled with other conflicting targets, is being blamed for hospitals using sharp practices to massage their performance figures.
NHS Confederation deputy chief executive David Stout said: "The NHS faces considerable financial pressures and scarce resources have to be used as effectively as possible.
"PCT commissioners take very seriously their role in protecting and improving the health of patients using limited funds. All PCT boards and management teams have senior clinicians who take a lead role in advising how local services should be planned and delivered.
"Where any decisions are taken to limit or reduce certain types of treatment, it is essential that commissioners and GPs are clear with patients and local communities from the outset about what services are and are not available to them, and how long they can expect to wait for treatment.
"Where there is poor commissioning practice, we should not support it. Nobody wants decisions on patient care taken in an arbitrary fashion purely based on cost rather than evidence."