NHS hospitals will be looking to exploit a host of "exciting" opportunities to move into private health markets, bosses say.

Self-governing hospitals - known as foundation trusts - have had their private income capped to date, but this is to be lifted in the NHS overhaul.

The Foundation Trust Network believes the move will spark a burst of innovation in the sector.

But campaigners said they were worried NHS services would be harmed.

To get foundation trust legislation through parliament in 2003, ministers agreed to a cap on private work to ensure the hospitals remained true to their NHS traditions.

This has stopped some of the leading hospitals in the NHS competing with private firms for patients.

But that will now change under the proposals unveiled in Monday's White Paper. Health Secretary Andrew Lansley said he wanted to create a "vibrant" industry of social enterprises by scrapping the rule and ordering all NHS trusts to become foundation trusts within three years.

Sue Slipman, director of the Foundation Trust Network, said the move would make a big difference.

"It is exciting for foundation trusts. We will have to wait to see what exactly happens, but there are huge opportunities to innovate."