A Department of Health (DoH) source told Computer Weekly that Milburn is due to announce that an extra £198m will be invested in NHS IT in 2002/2003, with similar increases to be pledged for each year up to 2005/2006 - beyond the current three-year spending round.
The new money will be used to support both national IT projects and local implementation strategies, including the development of electronic patient record systems for all acute hospitals.
Crucially, the money will be "ring-fenced" each year to ensure that it is invested in IT. Many health authorities were forced to raid funds earmarked for IT this year in order to pay deficits, meet waiting list initiatives and fund pay awards.
"The new funds are not a substitute for the current budget of £750m investment in IT up to 2005," the DoH source stressed. The £750m figure forms the balance of the £1bn already pledged for NHS IT by 2005.
Last week's Wanless report from the Treasury highlighted the NHS' under-investment in IT. It noted that investment in IT accounts for about 1.5% of healthcare spending in the UK, compared to 6% in the US.
Milburn is due to make the funding announcement at a Microsoft-sponsored DoH IT conference at which Gates will tell NHS chief executives how to use integrated systems to improve the quality of patient care.
A consortium comprising Microsoft, BT Health and Schlumberger-Sema - known as the Lightbulb Consortium - is currently in negotiations with the DoH over a major pilot project, based in the Midlands, to develop information systems to improve cancer care.
In addition to the funding pledge, Milburn is expected to announce that each of the 28 new strategic health authorities due to be established in England in 2003 will have a board-level IT director responsible for overseeing IT developments in the local health community.
"The new board-level directors will lead on IT at the local level," said the DoH source. They will have particular responsibility for implementation and integration of projects.
It is not yet clear whether these local IT tsars will have real authority and be able to drive through IT projects, or how they will link with NHS IT bodies such as the NHS Information Authority.
The moves were welcomed by the NHS Confederation. Policy manager Gary Fereday, said, "We welcome any additional money, as we have identified there is a real need to invest in information in the health service."