The Department of Health announced this week that it will pay all tuition fees for medical and dental students during the fifth and sixth year of their study.
Health secretary Frank Dobson said that the NHS will also provide means-tested bursaries for students from low-income families in the last two years of their study.
The department promises to further help students given bursaries By retaining their entitlement to income-contingent loans for the balance of their maintenance costs.
A Council of Heads of Medical Schools spokesman said: "We are sure this package will substantially offset any deterrent effect that the introduction of tuition fees and means testing might have on recruitment in fields because of the length of courses and additional costs incurred."