The National Health Service is facing a much bigger cash crisis than thought, the Conservatives said yesterday as they unveiled figures showing an overspend of £2.7bn in 2005-06, which will have to be recouped this year and next.

The NHS as a whole recorded a deficit of £536m last year, but the Tories claimed the true figure could be five times as high, with frontline services now facing severe cuts in order to make up the difference.