The NHS shakeup risks wrecking GPs' relationship with their patients, turning them into rationers of care who deny the sick the treatment they need, the leader of Britain's family doctors warns today.

GPs could be "compromised" by having to decide whether to provide sick patients with the best treatment or meet financial targets, according to Dr Clare Gerada, the chair of the Royal College of GPs. Giving GPs control of health budgets – the cornerstone of Andrew Lansley's restructuring of the NHS in England – could diminish the trust between patients and family doctors, she will tell the college's annual conference of 1,500 GPs in Liverpool.

"We must not risk long-term benefits being sacrificed in favour of short-term savings. How soon will it be, for example, before we stop referring for cochlear implants? An expensive intervention, but one that, in the long term, saves enormous amounts of public money. But not a saving from our budget. How long before we find ourselves injecting a patient's knee joint at Injections-R-us PLC instead of referring to an orthopaedic surgeon for a knee replacement?" Gerada will say.

Her warning reflects widespread concern among doctors that their new financial responsibilities will lead some patients to believe they have been refused treatment on grounds of cost.

"I worry we're heading towards a situation where healthcare will be like a budget airline. There'll be two queues: one for those who can afford to pay, and another for those who can't. Seats will be limited to those who muscle in first."

A Department of Health spokesperson said: "Talk of budget airlines is nonsense. In the new NHS, everyone will fly first class. Quality will improve as both patients and frontline staff are able to make choices. We have already amended the health and social care bill to make sure clinical commissioning groups are accountable … and each one will have a governing body that meets in public."

Malcolm Grant, the chair of the proposed NHS commissioning board, told MPs The coalition's health bill was "completely unintelligible" and Lansley's plans to abolish a whole tier of bureaucracy in the NHS would not go ahead, the new chair of the health service quango has told MPs.

In a submission to the health select committee, Malcolm Grant, currently the president of University College London, said the board, in charge of £60bn of taxpayers' money, would need to take account of "the four strategic health authority clusters and 50 primary care trust clusters operating at present".

In the present system, both bodies set the budgets for GPs and hospitals, effectively deciding the money available for treatment and care. This was to be swept away by the health secretary, with GPs and hospitals competing for patients and the money that went with them.

But Grant, a legal academic who clashed with Labour ministers when he advised the government over GM foods, appeared to squash the idea that this could be implemented immediately. "The board will need to carry out many of its functions across distinct geographical areas," he said – essentially retaining the trusts as outposts of the board. The admission reflects a growing sense within the NHS that the plans will not bring the savings that Lansley had promised when he set about abolishing swaths of bureaucrats. He argued that, by "liberating" the NHS, there would be no need for legions of administrators to run the service.

Last month, the Department of Health produced figures showing that the accumulated savings would be a little over £2bn. But the Treasury projected the cost of the reforms as £2.5bn.

Chris Ham, of the King's Fund, said the NHS was instead being organised into "clusters of PCTs and SHAs".

He added: "It's a fair question to ask how much will be saved if you are putting in place arrangements that are very similar to those existing today. We have been told there will be 3,000 staff within the board. That sounds like a lot of people."Earlier this week, a DoH spokesman insisted there was no turning back from the 2013 deadline, pointing out that Grant had made clear that there "will be no additional statutory tier between the board at national level and GPs at local level".