Hospitals which cover up failings could have to foot the bill for compensation claims while new data on staffing levels will be open to public scrutiny, the Health Secretary has said.
Jeremy Hunt set out a raft of measures in response to the inquiry into failings at Stafford Hospital, promising to create a culture of openness and honesty in the NHS.
Under the plans, any hospital that has failed to be open with a patient about serious errors or failings could be forced to pay part or all of a compensation claim rather than the tab being picked up by the whole NHS.
Overall, the Government accepted 281 out of 290 recommendations from the public inquiry, including 57 in principle and 20 in part.
It rejected calls for a statutory duty of candour on individual NHS staff to tell patients or their families if incidents have led to serious harm or death.
Instead, the Government will impose such a duty on organisations as a whole and will strengthen duty of candour on individuals through organisations such as the General Medical Council (GMC).
Professional codes of conduct and other measures will be used to create a "common responsibility" for staff to be honest with patients when mistakes occur, whether serious or not.
Staff will also be told to report "near misses" that could have led to death or serious injury.
The Government has previously announced plans to create a criminal offence of wilful neglect of patients by doctors and nurses.
Today's announcement means patients will be able to see staffing levels on wards via a new safety website. The National Institute for Health and Care Excellence (Nice) will publish guidance on what safe staffing looks like for different wards from August next year.
But the proposals stopped short of introducing a minimum staff-patient ratio on wards or enshrining this in law.
Organisations including the Royal College of Nursing (RCN) have called for a minimum of one nurse for every eight patients and Australia and parts of the US have a staff-to-patient minimum ratio.
Evidence suggests hospitals with more than eight patients per registered nurse (during the day time on general acute wards) would see around 20 extra deaths a year than better staffed hospitals.
Those units with worse staffing levels could expect more 'excess' deaths.
Mr Hunt said there was opposition to legal minimum staffing levels from several organisations, including the British Medical Association (BMA).
"The reason is that it's a different number for different wards," he said. "We decided the best way of tackling this was to require all hospitals to collect their staffing levels on a ward-by-ward basis.
"That will be a huge step and means people will know whether some of the problems that happened at Mid Staffs - which didn't happen throughout the hospital, which happened on particular wards - it will be possible to identify that through transparency."
Mr Hunt also told the Commons that cruelty became the norm at Stafford.
He said: "One of the most chilling accounts of the Francis report came from Mid Staffs employees, who considered the care they saw as being normal.
"Cruelty became normal in our NHS and no-one noticed."
He said the NHS had looked at the airline industry, where it was normal culture to report issues or near-misses.
"We want a signal to go out to every trust board and chief executive in the country, to every doctor and nurse - if you are in any doubt at all, report."
The inquiry into the scandal at Mid Staffordshire NHS Foundation Trust, where between 400 and 1,200 more patients died than would normally be expected, put forward 290 recommendations on improving care in English hospitals.
Chaired by Robert Francis QC, it identified a culture where patients were not at the heart of the system and said failings went from the top to the bottom of the NHS.
Under the new plans, a "fit and proper persons test" will also be introduced so managers who have failed in the past will be barred from taking up posts elsewhere in the system.
Every patient will also have the names of a responsible consultant and nurse listed above their bed.
But the Government rejected calls for healthcare assistants to be registered, saying training would be improved.
Mr Francis said the Government's response was "carefully considered and thorough".
He added: "Much has already changed in the health service. From the front line to the boards of national bodies, things are happening and being done which would have been inconceivable before the Mid Staffordshire inquiries two years ago.
"The system is on its way to becoming more transparent, and shortcomings are more readily admitted and more actively addressed than before."
Care Minister Norman Lamb said "bad things happen behind closed doors when you don't have the spotlight on what's going on".
He added: "This rigorous focus on opening everything up for public gaze is extraordinarily powerful."
Christina McAnea, head of health at the Unison union, said: "The Government has missed another opportunity to introduce fixed, safe nurse-to-patient ratios.
"There is safety in numbers when it comes to caring for patients and this one step would bring about a revolutionary change on the wards."
Dr Mark Porter, chairman of the BMA, said: "Centrally imposed mandatory staffing levels would be difficult to implement as they fail to recognise that not every patient is the same and, as such, safe levels will vary from time to time across hospitals.
"The Government is right to want to deal with this through a combination of evidence-based guidance, rigorous governance, transparency and openness."
Dr Peter Carter, chief executive of the RCN, said: "The RCN has been calling for some time for greater transparency in identifying the number of staff on each ward.
"By making this information available on a monthly basis we are going some way to ensuring that each hospital in the country offers patients access to the care they deserve."
He added: "Although we remain convinced that the mandatory regulation of all healthcare support workers is the most effective way of protecting patients, the announcement today is an important first step."
The charity Action Against Medical Accidents (AvMA) said it was "dismayed" that the legal duty of candour on organisations is to be restricted only to death or severe harm cases.
It said the "vast majority of incidents which cause significant harm would not be covered by this rule, meaning that organisations would be breaking no statutory rule in covering up such incidents".
Speaking in the Commons, shadow health secretary Andy Burnham said more action is required to raise standards.
He told MPs: "As Robert Francis has said, it's unacceptable the security guard at the door of the hospital is more regulated and subject to professional sanctions than the healthcare assistant tending to an elderly patient."