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Prime Minister Anthony Albanese has convened a meeting of his national cabinet this morning in Sydney as Commonwealth and state ministers try to finalise an agreement on a long-running dispute over healthcare funding.

It is a last-ditch effort by the PM to reach a deal on funding for public hospitals after his ministers have been locked in a stalemate with the states and territories.

The states claim the federal government offered in 2023 to increase its share of funding to 42.5 per cent this decade and to 45 per cent by 2035, but faced pushback from Albanese, who accused leaders of failing to constrain budgets.

The clock is ticking to finalise a deal, though, as South Australia will enter caretaker mode in February ahead of the March election.