Locum doctors and nurses are unfairly earning significantly more than their NHS counterparts by working for "rip-off agencies", according to health sector regulators.
Monitor and the NHS TDA (Trust Development Authority) said the trend had pushed the NHS into deficit and taken money away from treating patients.
It said measures had been introduced to tackle horse-trading between agencies and hospitals that are left paying out huge sums to pay for stand-in staff.
Doctors and nurses who work for agencies are being encouraged to return to the NHS in a bid to reduce the hospitals' locum bill, reported to be a main reason for a £2 billion overspend.
However one union official was reported as saying it was "hardly surprising" some staff opted for agency work as wages had been cut and conditions lacked flexibility.
The row comes as junior doctors prepare to hold a strike over pay and conditions on Wednesday.
A spokesman for Monitor and the NHS TDA said: "It can't be fair that a doctor or nurse working for an agency is being paid significantly more than a colleague doing the same job but working for the NHS.
"We've put in place measures which will tackle rip-off agencies whose use has pushed the NHS into deficit and taken money away from treating patients."
The regulators, which will merge later this year to become NHS Improvement, acknowledged that agency and locum staff can be "vital" for the NHS, although their over-use was unaffordable.
"We are tackling this issue, including encouraging staff to come back into substantive roles in the NHS rather than rely purely on agency work," the spokesman said.
Speaking to The Times, the head of the new combined regulator, Jim Mackey, explained there was a shortage of doctors and nurses.
He said: "Individual staff do exploit that. So if you're an on-call manager at 8 o'clock on a Friday night and you need to staff an A&E, I've seen it where there'll be individual negotiations with a doctor or nurse."
Mr Mackey said he had seen cases where a locum staff had abandoned a shift moments before they were due to start as they received a better offer elsewhere.
"It's bred really unprofessional behaviour out there and that's really, really bad," he told the newspaper.
Howard Catton, of the Royal College of Nursing, told The Times that NHS nurses had seen their pay fall 10% in the last five years and inflexible working conditions impacted family life.
"It's hardly surprising that many are deciding to work for agencies," he added.
Speaking on BBC1's Andrew Marr Show ahead of Wednesday's 24-hour walkout by junior doctors, Health Secretary Jeremy Hunt said he wanted to "restore morale in the profession".