A cash pot used to pay for life-extending drugs for cancer patients is to be extended, the Prime Minister has announced.

The Cancer Drugs Fund, worth £200 million a year, was set up for patients in England to access drugs approved by doctors but which have not been given the go-ahead for widespread use on the NHS.

The aim of the fund was to make it easier for medics to prescribe treatments even if they have not yet been approved by the National Institute for Health and Care Excellence (Nice).

The scheme was set to run until 2014 and campaigners raised concerns about where patients will turn to when the funding ceased.

But today, David Cameron said that the funding programme will run for an extra two years to March 2016.

The Rarer Cancers Foundation, which campaigned for the fund to be extended, welcomed the announcement .

Andrew Wilson, chief executive of the charity, said: " The Cancer Drugs Fund has made a huge difference to cancer patients in England, significantly improving the quality of treatment available to people with advanced forms of cancer. It has also addressed some of the historic inequities that have existed for people with rarer cancers, ensuring that access to treatment is not denied simply because you are unlucky enough to have a rare form of cancer.

"This is a compassionate, common sense announcement which will be warmly welcomed by many thousands of cancer patients. The NHS should be there when you need it the most. Without the Cancer Drugs Fund, NHS access to cancer drugs would go back a generation. With it, progress can continue."

So far more than 34,000 patients have benefited from the fund and the charity estimates that 16,500 extra patients will benefit each year as a result of the extension of the funding programme.

Mr Cameron said: " When I became Prime Minister three years ago many patients with rare cancers were being denied life saving treatments. That is why we created the Cancer Drugs Fund, it is why we are extending it, and it is why we are partnering with Cancer Research UK to conduct new research into the effectiveness of cancer drugs. It is only because we have protected health spending that we can afford these life saving treatments."

Dr Andrew Protheroe, consultant in medical oncology at The Churchill Hospital in Oxford, added: " The more treatment options that are available to me, the better job I feel I can do for my patients.

"There is nothing more frustrating than knowing there is an effective, licensed, evidence-based treatment available which I am not allowed to use. It is like trying to do your job with one hand tied behind your back. Before the Cancer Drugs Fund, doctors were not able to use a whole range of drugs which were part of standard practice in other countries. This fantastic announcement means we won't have to go back to those days. I will be able to continue to provide the best treatments possible for my patients."

Dr Harpal Kumar, chief executive of Cancer Research UK, said: "Every patient deserves the best possible treatment for their cancer. New treatments targeting the genetic changes in cancer are being developed all the time, and the Cancer Drugs Fund is a vital way for patients to get them as soon as they've been properly tested and shown to work."

Alongside plans to extend the fund, Mr Cameron also announced that Genomics England - a Government- owned organisation tasked with mapping the DNA of 100,000 patients with cancer and rare diseases - will begin a partnership with Cancer Research UK.

Dr Kumar added: "Our partnership with Genomics England builds on our research testing genetic changes in tumours to understand cancer in all its intricate detail. This rapidly-changing research field lays the foundations for even faster progress, saving many more lives from this devastating disease."

Shadow Minister for Care Liz Kendall said: "The reality is that David Cameron is letting down cancer patients.

"He has scrapped expert cancer networks that drove huge improvements in the quality of cancer care.

"A recent report for Cancer Research UK found NHS staff were worried that the Government's NHS reorganisation was fragmenting cancer services and stalling the dramatic improvements in cancer treatment seen over the last decade.

"David Cameron should also stand up to the tobacco lobby rather than caving in to them over standardised cigarette packaging, which experts say would be a powerful weapon in the long-term fight against cancer."

Mark Flannagan, chief executive of the charity Beating Bowel Cancer, said: "This announcement means that the NHS will continue to provide cancer patients with drugs that will help them to live a longer and better life.

"The introduction of the fund was a milestone in helping cancer patients to benefit from the best treatments in the world. Many more bowel cancer patients will now be given hope and peace of mind that these treatments will continue to be made available to them if recommended by their doctor."

Target Ovarian Cancer chief executive Annwen Jones said: "This is positive news for cancer patients who have more than enough to be worrying about without the fear of being deprived of potentially life-prolonging drugs on the NHS. But it's just a stop-gap.

"We're calling on the Government for clarity on the new measures that will eventually replace the Cancer Drugs Fund. We need confirmation that women with ovarian cancer who receive treatment in 2016 through the CDF will be able to continue their treatment, and that new women who could benefit from treatments available on the CDF will be able to have access from 2016 onwards."

The charity said Jenny Bogle is living with ovarian cancer, but didn't meet the CDF criteria for Avastin, a drug shown to delay recurrence. Ms Bogle said: "I have a wealthy friend and an oncologist who are determined to keep me going for as long as possible so I was able to access Avastin privately in the end. I'm lucky to be here - but it's just not fair. It shouldn't be a matter of luck. If I were living in a different postcode, were vulnerable or less pushy or didn't have the support, I would have probably died years ago. I personally find that quite hard to live with."