Doctors could soon use video-links to treat patients in their homes as part of Britain's first virtual hospital.

The 10m project will fund research doctors based at the John Radcliffe Hospital, in Headington, to carry out cyberspace ward rounds with patients chatting to them on e-mail and on television screens.

It is thought the futuristic scheme, made possible with the latest technology, could eventually cut NHS costs and help patients recover quicker in their own homes.

Run by the Defence Evaluation Research Agency (Dera) part of the Ministry of Defence the project is being funded by the Treasury and expects to enrol 250 patients during the two-year pilot programme. Dera spokesman Joanna Sale said illnesses to be monitored at first would include coronary heart disease, stroke and cancer treatment.

She said: "We are involved because of the huge logistics of the exercise it's like a huge military operation.

"Patients could be five or 100 miles down the road from their specialist and it's set to cut down on repetitive consultations and staying in hospital for long periods of time under observation.

"Not only will it cut hospital costs by using less beds, but it is also proven that patients get better quicker and have a more positive sense of morale in their own homes, surrounded by their family." So far, Dera has been in discussion with three sets of researchers, including those at the JR, doctors in west Surrey and Guy's and St Thomas' hospitals, in London.

People being treated under the project could be anywhere in the country. Initial trials are due to start within months.

They will be given special equipment to suit their needs, which will take measurements like blood pressure, heart rate and temperature.