Hospitals currently have to see non-urgent patients within 18 weeks but there are nearly 250,000 on lists who have waited for longer than this.
Ministers believe there is not enough incentive for these patients to be treated, meaning some are left "languishing" unnecessarily.
They are demanding NHS managers reduce the number of long waiters by about 50,000 by April.
The whole backlog is not being targeted as it is accepted that some patients wait longer than 18 weeks for justifiable clinical reasons - perhaps because they have to lose weight before having surgery or for personal or work commitments.
There is particular concern within the government about some of the longest waits being seen. Among the 250,000 who have been waiting for longer than 18 weeks are just over 100,000 who have waited for more than six months and 20,000 waiting at least a year.Continue reading the main story
The government's latest NHS initiative is being viewed with a certain degree of irony within the health service.
This was an administration that came to power promising to move away from what it said was the target culture created by Labour.
Within months of seizing the reins ministers announced the 18-week waiting time target was being relaxed.
But that is not how it feels now for those on the front-line.
When criticism of the government's reforms was at its peak in the early summer the prime minister reiterated his commitment to the 18-week limit. Managers were left in no doubt, there was to be no let up.
And now there is growing concern about long waiters, ministers have responded by introducing what is effectively a new target to tackle the perverse incentives of an existing target.However, these figures should be seen in the context of the total size of the waiting list, which currently stands at 2.6 million for non-emergency care, such as knee and hip replacements.
Health Secretary Andrew Lansley has blamed the targets established by the Labour government which he said had created a perverse incentive whereby the NHS was free to leave patients "languishing" on waiting lists.
He said: "Because of Labour's perverse approach, the NHS actually had an incentive not to treat patients.
"The new approach we will take from next year will clamp down on this practice. We will reduce the number of patients on hidden waiting lists, ensuring everyone gets access to the treatment they need."
Jo Webber, deputy policy director of the NHS Confederation, said she welcomed what the government was trying to do.
"This indicator will shine a spotlight on one of the many aspects of patient waiting the government does not currently measure."Continue reading the main story There are currently 2.6 million patients on waiting lists for non-emergency treatment in EnglandOf those, nearly 250,000 have waited for longer than 18 weeksOf which, just over 100,000 have waited for longer than six months and 20,000 for more than a yearThe NHS sees about 300,000 in-patients a month and nearly 900,000 out-patientsBut shadow health secretary Andy Burnham said the government was having to introduce these new rules because of Mr Lansley's failure to "get a grip" on waiting times.
And he added the government's overhaul of the NHS would just make matter worse as NHS hospitals would become distracted by competing with the private sector.
"This will take us straight back to bad old days of the Tory NHS, where patients are forced to choose between waiting longer or paying to go private."
And Professor John Appleby, of the King's Fund, a health think tank, questioned whether the current system was creating perverse incentives.
He said there was some evidence the longest waits were actually going down.
"If they really want to tackle the longest waits they could simply say that no patient should wait longer than a year before treatment begins," he added.