PRIME Minister Tony Blair said today a "crunch point" had been reached in the NHS, but the Government must press ahead with its reforms.

In his second speech in a week on the future of the service, Mr Blair admitted that the scale of the challenge to deliver a new NHS was "very, very tough".

However, he insisted that now was the moment for the Government to "hold our nerve" in the face of criticism and change.

Sweating heavily as he gave his speech to about 80 senior consultants and members of NHS organisations, Mr Blair said there would be a year of challenge "as the new system bites".

He added: "There will be difficult transitions but the interesting thing is that the remedies are available."

Mr Blair was giving his speech at Great George Street in central London - the same place where he launched the Labour manifesto in 1997.

Mr Blair insisted that much had been done since Labour came to power - including cutting waiting lists, increasing pay for doctors and nurses, and building more hospitals.

He said none of the improvements had happened by chance, adding: "Each reform was in its time opposed. Each is now considered the norm.

"The lesson, especially at the point of difficulty, is if it's right, do it.

"In fact, do more of it.

"Take the tough decisions which are not the cause of the NHS problems but the route to making the NHS even better, fitter for the modern world."

Mr Blair also referred to the deficit being tackled by primary care trusts up and down the country.

"We need to be clear about why the deficits are appearing," he said.

"The reforms expose the deficits, they do not create them. Our reforms are opening up the system for scrutiny. They are closing off the hiding places for poor financial management."