David Cameron is preparing to bow to insurmountable political opposition by putting the coalition's flagship NHS reform bill on hold beyond Easter, and possibly for as long as three months.

The announcement of a delay, agreed at a meeting involving Cameron and Cabinet colleagues last Thursday, is expected to come this week at a joint event involving David Cameron, Nick Clegg and the health secretary Andrew Lansley.

Some sources have told the Guardian that Cameron is no longer listening to Lansley, and is taking his advice from Sir David Nicholson, the NHS chief executive.

In a sign of the political obstacles facing the prime minister, the leaders of a Liberal Democrat revolt against the reforms will release their 23 detailed demands for sweeping changes to the bill.

The bill provides for the transfer of about 60% of the NHS budget to GP commissioning consortia, the abolition of primary care trusts, the appointment of an independent NHS commissioning board and the extension of a regulated market in healthcare provision.

In a series of detailed papers handed to the Guardian, the rebel demands include piloting of the reforms, constraints on the market, local democratic scrutiny of GP commissioning bodies, and no change to the legal status of foundation hospitals.

Dr Evan Harris, who helped draft the original amendments, and is a vice-chair of the party's national policy committee said: "This list of amendments is the minimum needed to satisfy the requirements of Lib Dem policy as set out in the coalition agreement and the recent conference motion, and this will be an essential guide to Lib Dem MPs, the leadership of the party, and indeed the Conservatives of what needs to change.

"The Liberal Democrats do not expect their MPs to vote down the bill, but will not accept our parliamentarians being whipped to vote against any of the necessary amendments needed to provide democratic accountability of GP-led commissioning, guarantee the comprehensive nature of the NHS and rein in the original plans for an NHS market."

The Lib Dem and Labour pressure, as well as public confusion has forced Cameron to pause the bill until after the local elections on 5 May.

Lansley had been hoping to make changes to the bill in the Lords, but Clegg wants them passed in the Commons.

There is still no political agreement at the top of the government on whether the delay is merely a symbolic concession to re-explain the reforms, the position adopted by Lansley, or to rewrite them in the way the Liberal Democrat activists are demanding.

Lansley is willing to table amendments to rule out competition based on price, cherry picking by private providers and constrain the role of the Regulator Monitor. He opposes politicians being involved in commissioning, and says the reforms are unstoppable now that 90% of England is covered by GP led commissioning.

Either way the retreat on the bill's timetable places a blight over the NHS as managers are left wondering whether the NHS reform timetable on the ground is now jeopardised.

The NHS Confederation acting chief executive Nigel Edwards pointed out on Sunday : "On Friday the NHS let go 1,500 managers, and a significant number of primary care trust managers have been let go in the last few weeks. We may need to rehire some of these people and that is astonishing."

In a speech on public service reform on Monday ,Ed Miliband, the Labour leader, will call on Cameron to hold all-party talks to see what can be salvaged from what he will describe as a disgraceful way to treat the NHS. Miliband will claim he backs the principle of public service reform but say the way in which "this Conservative-led government has gone about NHS reform is a disgrace".He will say: "We read in the newspapers that horse trading is taking place as the two coalition parties try to reconcile their differences over a broken bill.

"Contradictory briefings to the newspapers from Tory sources, from Treasury sources, from health department sources and – in case we forgot – from the Lib Dems. Each one adding to the sense of utter confusion and chaos about a bill that has completed its committee stage of the House of Commons.

"It is bad government. It is not how the future of the health service should be determined.This is a direct consequence of a coalition based on power, convenience and ambition rather than values.It is an insult to the people who work in the health service, it is an insult to the people who use it and the prime minister should be ashamed of the way he is running the NHS, the proudest institution of Britain."

One Whitehall source said: "Andrew Lansley is now increasingly sidelined. You have now got David Cameron listening to David Nicholson, so Andrew Lansley is less relevant"

But Nicholson issued a statement to deny he had claimed the reforms needed to be delayed, adding "the modernisation of the NHS is designed to secure our ability to meet the financial challenge over the next four years. The pace of progress of transition will help us do this."

A Number 10 spokesman said: "The bill has now successfully finished committee stage in the Commons and there is a natural break before it moves to the Lords. We have always been prepared to listen, having already clarified that there is no question of privatisation and that competition will be based on quality, and will continue to do so."