The Department of Health yesterday announced more than £9 million for specialist children's hospitals to provide a financial cushion to help them cope with the new NHS system of payment by results.
Heads of four leading children's hospitals warned earlier this year that payment by results unfairly disadvantaged them, putting vital services under threat.
In a letter to Ministers in April, the chairs and chief executives of Alder Hey in Liverpool, London's Great Ormond Street and Birmingham and Sheffield children's hospitals said that "inaccurate and highly insensitive" tariffs would cost them £22 million in 2006-07 alone.
Yesterday, Health Minister Lord Warner announced additional support for the hospitals from strategic health authorities for 2006-07 worth £4.9 million to Alder Hey, £3.4 million to Great Ormond Street and £900,000 to Sheffield.
He acknowledged that the tariff system for allocating funding "does not in all cases work in practice" for specialist children's hospitals because they do not have the same mix of routine and complex cases found in most trusts.
Lord Warner said: "Payment by results provides a fair and transparent basis for funding healthcare, together with driving up quality and value for money across the NHS. It's also fundamental to patient choice.
"Today I am announcing measures which address problems being faced by specialist children's hospitals and support the White Paper vision of care closer to home."