A controversial NHS funding shake-up that would have taken millions from Bradford has been thrown out after protests.

The proposal to shift cash from deprived areas to those with higher numbers of pensioners would have plunged health services into jeopardy, NHS England decided.

Instead health bodies in West Yorkshire will receive increases in line with inflation through to 2016.

Extra cash will still be redirected to 77 areas with older populations considered “underfunded”, mainly in the South and South West, but ten per cent of funding will still be handed out on the basis of deprivation, protecting budgets in the North.

The decision has been greeted with relief in Bradford after health professionals warned of “significant cuts in services for patients” if it went ahead.

Under the worst-case scenario, more than £23 per head would have been taken from clinical commissioning groups (CCGs), which buy treatments for patients.

If that formula had been applied this year, Bradford would have lost £10.4m, with huge losses also in Calderdale (£25.2m) and North Kirklees (£25.3m).

But, at NHS England’s board meeting, its chairman Sir Malcolm Grant said the plan was too risky when CCGs were already under financial strain.

He said: “The question for us is how we balance what I actually consider quite a serious misallocation at the moment against the other duty in our mandate – which is the stabilisation of the system.”

As a result, budgets across West Yorkshire will rise by 2.14 per cent in 2015/16 and at least 1.7 per cent the following year.

Other areas will enjoy increases of nearly five per cent next year, but the meeting heard protests this would fail to tackle “underfunding” in much of the South.

Paul Baumann, the chief financial officer, said: “Underfunding has its consequences. There are a substantial and growing number of CCGs that are finding it impossible to live within their means.”

Leader of Bradford Council Coun David Green, who is in charge of public health in the district, had called the proposals “short-sighted and potentially dangerous”.

Last night he said: “I’m pleased to see they’ve not accepted the proposed formula, but clearly we need to see the details of the CCGs’ allocations. I hope this means we are not going to be facing further cuts in our health services in Bradford.”

When the proposed funding formula was announced, Bradford City and Bradford Districts CCGs called for it to be altered to address health inequalities and said it would share its views with the Government.

Coun Mike Gibbons (Con, Ilkley), chairman of Bradford Council’s health and social care overview and scrutiny committee, said: “I’m pleased the Government has listened to representations from areas like Bradford, as well as other deprived regions, and a re-think of the funding structure is welcomed.”

Coun Jeanette Sunderland, leader of the Council’s Liberal Democrat group, who had also criticised the plans, was not available for comment last night.