The government's controversial push to create a database of patients' records containing the nation's medical details will be boosted by a £1bn technology fund, ministers will announce today.

Despite privacy campaigners warning that identifiable patient data could harm rather than help the public, the health secretary, Jeremy Hunt, will argue today that the sharing of such information is necessary to help ease pressures on A&E departments by cutting down on the paperwork that hampers clinicians.

The cash will be used for new IT systems in hospitals that will allow consultants, GPs' surgeries, social workers and out-of-hours doctors to share patients' electronic records routinely "so they will be able to give them personal and effective treatment with full knowledge of their care history".

The government will point out some NHS hospitals are already using this technology. The new Queen Elizabeth hospital in Birmingham has an online portal that allows patients to view and update their own medical records so doctors can get real-time updates.

Hunt has also pointed out that patients are dying because they are being prescribed the wrong drug – with errors found in almost one in 12 hospitals' prescriptions. The health secretary claims new technology "can cut these errors by half".

Hospitals will be expected to bid for cash from a £500m tech fund with detailed plans of how to implement the scheme – and winners will be expected to match the government's contribution.

Hunt said: "The public are rightly sceptical about NHS IT after the failures of the past. But we can't let past failures hold patients back from seeing the benefits of the technology revolution that is transforming services all around us. It is simply maddening to hear stories of elderly dementia patients turning up at A&E with no one able to access their medical history.

"Technology is key to helping our A&E staff meet the massive demand they face as the population increases and ages. This is something on which the government must and will succeed."

However, experts warned that in the past patients have been deterred from speaking plainly to doctors for fear of other agencies being privy to their medical records. Ross Anderson, professor of security engineering at Cambridge University, told the Guardian that when a similar local scheme was set up in Oxford a local charity pointed out that "low-income mothers refused to talk to GPs about post-natal depression because they were worried that it would get back to social services. Government is not thinking it through."

However, there appears to be a steady relaxation of privacy rights in the NHS. In July it was revealed private companies would be able to access confidential medical records for as little as £1.

Campaigners also questioned why, despite government assurances, patients who had opted out were being included in the schemes. Terri Dowty, of MedConfidential, said the health secretary had promised 750,000 patients throughout England, who had already opted out of having their data shared under the old summary care record scheme, would be automatically protected from the new NHS plans. However, this decision was overturned by the NHS.

Dowty said: "We have real concerns that the government is not listening. These plans will have a chilling effect on the relationship between doctors and patients. Will women suffering from domestic abuse want to tell their GP if their husbands could beat the password to their patient record out of them? Will the teenager seeking contraception want that information written down?"

In response, a Department of Health spokesman said: "It is obviously of critical importance that health professionals can maintain accurate records of patient care, so patients get the right treatment. The NHS Constitution makes clear that patients have the right to request that confidential information – in whatever form it is kept – is not used beyond their own care.

"Any electronic patient records system adopted by hospitals must be secure and comply with NHS England's requirement for modern, safe standards of record-keeping."