Health Secretary Patricia Hewitt has welcomed applications from two leading Midland hospital trusts to break away from NHS control.
Birmingham Children's Hospital and The Dudley Group of Hospitals, which includes Russells Hall Hospital in Dudley, have both applied for foundation status.
Foundation hospitals make more of their own decisions instead of following instructions from central government.
They are able to tailor their services to meet the demands of local residents and are allowed to borrow money.
But they have been heavily criticised by unions such as Unison, who claim they create a "two-tier" health system because they have advantages over other hospitals.
Only hospitals which receive excellent ratings from the Healthcare Commission, the official inspectors, were allowed to apply.
Both Birmingham Children's Hospital and The Dudley Group of Hospitals received "three star" ratings last year, the highest possible.
Their applications will now be considered by an independent regulator, and a final decision is expected at the end of the year.
Ms Hewitt said: "In the coming weeks we will be considering the merits of all these applications and deciding which ones to recommend to the independent regulator for approval.
"Foundation trusts enjoy greater freedom from day-today central controls and the benefits this brings, such as the ability to innovate new ways of delivering services for patients.
"Our aim is for all acute and mental health trusts to become foundation trusts.
"We are working hard to support as many trusts as possible to foundation status so that all local communities can have a greater say in how their local hospital services are delivered"
Les Williams, project director for foundation status with The Dudley Group of Hospitals, said: "We provide a good service now but becoming a foundation trust will allow us to improve.
"Because we will have more flexibility and freedom, we will have more control over how we deliver services and we may be able to introduce new services."
But a Unison spokesman said the union believed foundation hospitals threatened the principles of the national health service.