Britain's biggest business organisation has rounded on the PFI process, accusing the Government of wasting millions of pounds on complex hospital projects which could have been used instead on frontline services.
The CBI said extensive delays and poor procurement practices were destroying the full potential of Private Finance Initiatives.
The extra burden placed on PFI schemes could top #120 million because of the time taken to get hospital schemes approved, the CBI claimed.
The organisation's critical comments came as a Birmingham health service pressure group claimed that the true cost to taxpayers of the city's new super hospital would top #1.3 billion.
Birmingham NHS Concern chairman Gordon Will insisted the Edgbaston hospital could have been built at a fraction of the cost and be open today if the Government had not insisted on funding the scheme through a PFI.
Mr Will said Birmingham Health Authority estimated in 1997 that the cost of the new hospital would be under #200 million.
The Department of Health gave the go-ahead last week for a #599 million project.
But the cost to taxpayers will be far more with #39 million PFI repayments every year for 39 years, according to Mr Will.
Under conventional Treasury procurement procedures the Government could have borrowed money from the private sector at a substantially lower rate of interest than the PFI developer, Mr Will claimed.
Birmingham NHS Concern also claims that the super hospital will offer poorer facilities to patients.
"Three wards, 108 beds, will be effectively mothballed. This represents nine per cent of the estimated planned need of 1,213 beds. Who knows if they will ever be open?
The CBI is urging the Government to put its trust in the private sector to deliver large public service projects.
John Cridland, CBI deputy director-general, said: "The private sector has delivered more facilities and services on time and to budget than the old system of public design and construction ever did, yet unnecessary problems remain."
Last night a Department of Health spokesman rejected Mr Will's claims. He said: "Part of the reason we didn't commit to definite bed numbers is because we don't know how the NHS will be working in areas like Birmingham and London in the next three or four years.
"These white spaces are there if needed but if more care is provided within the community it would be foolish to have wards not being used."
Mark Britnell, chief executive of University Hospital Birmingham NHS Foundation Trust, said: "We don't recognise these figures and it's like comparing apples with pears."