Controversial NHS computer system in doubt after major supplier is sacked

A £12.7 billion scheme to computerise every patient's medical records is in jeopardy after the NHS was forced to cancel a contract with a major information technology firm.

The firing of Fujitsu is expected to delay even further the project - which is already four years late.

Two other firms are expected to take on the work and Fujitsu will foot the bill for ending the contract, in a move that could cost the Japanese-owned services company £300million.

It is a huge embarrassment to the much-heralded scheme - which will store medical notes, X-rays and scans, meaning medical staff will be better informed about who they are treating.

But civil liberties groups say the system would mean patients' medical details would be vulnerable.

Last year, the concerns were highlighted when personal details of thousands of junior doctors applying for jobs were made available on the internet.

The system will also enable people to choose via computer where and when they have medical treatment.

It is expected to link more than 30,000 GPs in England to nearly 300 hospitals. It is understood the dispute which led to Fujitsu's departure centred on NHS chiefs' demand for more flexibility in delivery of the services - a request that would cost more. Fujitsu wanted more money - but the Health Service said no.

An NHS Connecting for Health spokesman said it had not been possible to reach an agreement on the core Fujitsu contract.

Liberal Democrat health spokesman Norman Lamb said: 'This is yet another example of a hopelessly flawed, centrally imposed project that has not been properly thought through.'

His Tory counterpart, Stephen O'Brien, said: 'Gordon Brown's relentless attempt to ram through a monolithic, top-down, centralised, one-size-fits-all NHS supercomputer system is crashing down around his ears.'