The official estimate of the number of Britons who could die this winter from swine flu is to be reduced substantially to roughly 20,000 because health experts have decided the virus is far less lethal than first feared.

Ministers and health officials predicted in July that up to 65,000 people could be killed across the UK by the H1N1 virus, as infection rates accelerated over the summer and deaths began to mount.

But the Scottish health secretary, Nicola Sturgeon, said this morning that that official worst case scenario had been revised downwards, with experts now predicting a death rate of 0.1%, much lower than the initial estimate of 0.35%.

Swine flu infections have continued over the summer and at least 66 people have died. Ministers still believe the number of cases will rise steeply this winter, causing a full-blown epidemic and putting public services and businesses under severe strain.

The new estimate is expected to be confirmed by Sir Liam Donaldson, the chief medical officer for England and Wales, this afternoon.

Sturgeon's statement to the Scottish parliament today confirms strong signals from government advisers, including the Scottish chief medical officer Harry Burns, that H1N1 is a relatively mild virus. Burns and other health experts noted that in the US, fatalities were rare.

Even so, health services, council morgues and crematoria, and the economy could be put under severe strain. Sturgeon said that up to 30% of the population could fall ill. Millions of people may have the H1N1 at the same time.

An official UK report published today warns: "It is possible that the virus may mutate, becoming more virulent, and it is important to remain prepared for the full range of possibilities."

Sturgeon disclosed that the first swine flu vaccines are due to be given to key target groups, such as pregnant women, people with weak immune systems and their immediate families, and people over 65, from mid-October onwards.

The European Medicines Agency is expected to license the vaccines later this month or in early October. The vaccination programme would be backed up by a UK-wide publicity and public information campaign, and 13 million people across the UK are expected to be vaccinated in the first phase.

She said: "Estimates of delivery of vaccine from the manufacturers are subject to change, but the current assessment suggests over 54m vaccine doses will be delivered to the UK by the end of December. From this we estimate a potential delivery to Scotland in the region of 300-350,000 doses per week from the date when the vaccine is licensed."

She said the revised death rates estimate did not take account of the vaccination programme, which could significantly cut the death rates by targeting some of the most vulnerable groups.

"Furthermore, they are not predictions; they are assumptions that allow us to plan for the worst, while continuing to hope for the best," she said. "And while having lower estimates for hospitalised cases and fatalities is positive, the assumptions will be kept under review."