The NHS hopes to slash its losses through fraud by up to 40 per cent over the next three years, using data analysis and visualisation software from business intelligence company SAS.

The NHS Counter Fraud Service (CFS) will deploy a new fraud detection system that uses neural networking developed by SAS to predict where fraud is most likely to occur.

Neural networks are artificial systems capable of sophisticated, almost 'intelligent' calculations similar to the human brain.

Jim Gee, director of the CFS, told vnunet.com that the objective is to reduce fraud to the absolute minimum.

"We're looking to work with SAS to develop much more advanced software than has been traditionally available," he said.

The CFS has already recovered almost £200m since it was set up in 1998, the equivalent of three new hospitals, more than 12,000 heart transplants or 46,000 hip replacements.

Since 1999, pharmaceutical patient fraud has been reduced from £117m to £69m, dental patient fraud is down 25 per cent to £30m, and optical patient fraud has declined from £13m to £10m, according to CFS estimates.

Fraud by NHS professionals has fallen by up to 30 per cent, and the amount of money recovered has increased sevenfold over the past three years.

Recent cases include the chief executive of one NHS trust successfully prosecuted for fraudulent mileage claims totalling £50,000, and a GP in the West Country prosecuted for £800,000. In the latter case, two motor boats were also recovered

But, despite huge achievements, Gee admitted that there is still work to be done.

"We want to learn from every type of fraud and we want to target our fraud detection work more effectively," he explained. "Our first objective is to get something to protect NHS resources."

Gee suggested that fraud detection systems could be of enormous benefit to other public sector bodies, including police forces, as well as organisations in the private sector.

"But at the moment there's enough work to be done in the NHS," he said.

The NHS is the largest organisation in Europe, with an annual budget of £70bn.

In a statement Health Minister Lord Hunt said: "We aim to learn from every example of fraud so that we continuously improve our capacity to detect and stop it.

"We shall be using the most sophisticated technology to target those who would deprive the NHS of the resources it needs for patient care."