The government is due to publish proposals which are likely to dramatically reshape the legal aid system in England and Wales.

Ministers hope the reform will save ?100 million a year.

Under the new plans, lawyers would bid for all legal aid work generated by groups of police stations, rather than be paid by the hour.

The plans are already facing opposition from the legal profession which says they would put people out of work.

The proposals are based on a report by Lord Carter of Coles, who reviewed the ?2 billion-a-year legal aid structure and published his findings in July.

Job losses

His report predicted that about 400 small law firms would merge or go out of business.

And while young barristers would be paid 16 to 30% more in fees, top-earning QCs would face cuts, he said.

Money would be redirected from criminal legal aid, which is expected to be cut by more than 20% over four years, to under-funded civil law work.

Lord Carter said his 62 recommendations would strip ?100 million from the system over a five-year period.

After publishing his report in July, he said: "The existing system does permit people to make unreasonably large amounts of money.

"We believe the new system can find ways to constrain that."

Rising costs

Since 1997, legal aid costs have risen from ?1.5 billion a year to ?2.1 billion.

Lord Carter revealed that ?90 million of that was spent on paying solicitors for the time they spent travelling or waiting at police stations and magistrates' courts in 2004-2005.

The Law Society, the solicitors' professional body, opposes the reforms.

And the Criminal Courts Solicitors' Association has said the proposals would force 1,000 law firms to close.

The government's proposals, which have gone out to consultation, will be closely based on Lord Carter's recommendations.