The Abbott government will spend hundreds of millions of dollars trying to salvage a Labor's electronic health scheme that has been branded an irredeemable failure.

Five hundred days after receiving a review into the e-health system – a scheme that has already cost taxpayers $1 billion over the last five years – the coalition still has not publicly announced whether it intends to save it or axe it.

"Labor has left a complex, expensive mess behind and this is not an easy overnight fix": Sussan Ley. Credit:Alex Ellinghausen

But Fairfax Media has learnt the government has decided to try to save the system and will make the announcement in the May 12 budget. The rescue package is set to cost hundreds of millions of dollars over the next four years.

Labor announced the Personally Controlled Electronic Health Record system in 2010, pledging to get it up and running within two years at a cost of less than $500 million. The scheme allows patients to opt in to a personal electronic record of their medical history.