Solicitors will be forced to bid against each other in a price war for the right to do legal aid work, under plans outlined yesterday.

The plans from the Legal Services Commission, which runs the £2 billion-a-year legal aid scheme, could lead to hundreds of law firms having to close if their bid fails. The commission plans to pilot a scheme in London - to be introduced nationally if successful - in which some legal aid work would be allocated through a "bidding war" to the most cost-effective bids.