Unveiling the results of its fundamental review of the legal aid system, the Department for Constitutional Affairs said further analysis on how to cut the ?1.1 billion crime spend is needed.

An independent review of new models of procuring publicly funded legal services ? and their impact on lawyers ? will be headed by Lord Carter of Coles. It will report in January 2006.

The Lord Chancellor, Lord Falconer, said the government had dithered enough and needed to come to a firm conclusion, with a renewed focus on reining in the price of high-cost cases, as well as crime cases overall. There will be no new money for legal aid; Lord Falconer has previously said crime spending needs to fall and civil spending rise.

This week, he said he envisaged large block contracts for a smaller number of firms. He admitted he was prepared to extend competitive tendering proposals for magistrates? court work to the Crown Court but denied this would cause firms to go under, saying: ?I wouldn?t expect them to go out of practice. I would expect them to enter into mergers or go into bigger firms.?

He added that salaried services could be beneficial in civil through plans to pilot community legal advice centres, which would see social welfare lawyers working in deprived communities.

Cautiously welcoming the moves, Legal Aid Practitioners Group director Richard Miller argued that the government needed urgently to make firm plans and to examine external pressures on the fund. ?The most significant of these is the impact of the activities of other government departments, especially the Home Office,? he said. ?Unless and until that is tackled, the pressures will worsen.?

The Law Society agreed that funds needed to be redistributed, although chief executive Janet Paraskeva said she hoped tendering would be dropped. ?The current proposals for competitive price tendering are aimed at crude cost-cutting at the expense of access to justice,? she warned. ?The Carter Review must be used to assess whether value for money can be achieved in a way that does not put vulnerable individuals at risk and it must also take account of the assessment of impact on firms working in black and minority ethnic communities.?

Criminal Law Solicitors Association chairwoman Helen Cousins said: ?A review of procurement will give us all an opportunity to work towards a legal aid system which is sustainable into the future.?