Councils will be free to spend their health budgets on cycling infrastructure and training when controversial reforms come into effect next April.

The disclosure that local authorities, which no longer receive specific road-safety grants from the Government, will be able to invest money earmarked for health on promoting cycling has been welcomed by transport groups but opposed by some health workers.

Norman Baker, the Transport Minister, and Anna Soubry, the Public Health Minister, told The Times that they would have no objection to money being diverted.

Their comments came as the medicines watchdog issued its first guidance to councils, schools and companies to promote cycling and walking as a way of improving public health.

The National Institute for Health and Clinical Excellence called for councils