GPs operate "gentlemen's agreements" in which they promise not to take other doctors' patients, a government minister has claimed.
Health minister Ben Bradshaw blamed the GP pay system for including a lump sum which "dampened the incentive" to attract new patients and allowed some practices to survive with a small number of patients.
Currently, basic pay consists of the lump sum in addition to payments per patient.
Mr Bradshaw told the BBC: "There is no doubt there are some areas where gentlemen's agreements operate that mitigate against lists being open to new patients and therefore work against real patient choice."
He warned that the current system was working against government plans to encourage patient choice as a way of fostering competition and driving up standards in healthcare.
The British Medical Association denied the existence of gentlemen's agreements.
Laurence Buckman, chairman of the BMA's GPs Committee, told the BBC: "It is absolute nonsense to suggest there are gentlemen's agreements – it just doesn't happen.
"Nor are we going to compete for patients, that is not the way general practice works."
Mr Bradshaw's comments came ahead of a publication of the Government's strategy for primary and community care.