A young man drags himself slowly in to Dr Shahrad Taheri's weight management clinic, leaning heavily on a stick, with the curious gait of someone whose legs are pushed into an awkward angle below the knee, splayed by excess flesh around the thighs. The tremendous weight he carries has injured his spine, and walking is very painful.

"I've put in for a wheelchair. I've not got one yet," he says. He thinks the delay is due to NHS funding constraints. Peter is 30 and morbidly obese.

Dr Taheri has recommended a gastric bypass to help him lose weight before he damages his health further, but unfortunately the criteria set by the primary care trust (PCT) have recently changed and his patient now needs to be more overweight in order to qualify for treatment.

"The NHS is expected to make savings . . . I don't know how they are going to do that, but one of the ways is by restricting the things they provide," Dr Taheri tells his patient.

"Well, it was just too dear," Peter replies calmly.

Both men are totally impassive, and discuss this in very matter-of-fact way, as if it is a matter of no surprise, and certainly not a cause for outrage. Their acceptance of the situation is odd. This is not a discussion about delaying treatment or a waiting list; it is a flat refusal to fund the necessary procedure, but both men accept it as another unfortunate card that life has dealt out.

However, Peter's girlfriend, who has come with him to the Heartlands clinic, is bubbling with anxiety. "He got taken into hospital before Christmas; we thought he was going to have a heart attack. He is really struggling with his walking. He can't walk," she says. She is also very overweight, but much more mobile than her boyfriend.

"What are the portions like?" the doctor asks her.

"He's eating smaller amounts all through the day, but the medication doesn't help. The painkillers make him hungry. It's a catch-22," she says.

Peter has a body mass index (BMI) of 44 (calculated by dividing his weight by his height). The National Institute for Health and Clinical Excellence (Nice) has analysed the cost-effectiveness of bariatric surgery, and concludes that patients should have a BMI of 40 or above to qualify for the treatment; if their BMI is higher they are less likely to respond well to the surgery. Until January, most of the Birmingham PCTs, in the area where Heartlands hospital is based, followed these guidelines, but suddenly the eligibility criteria was set at a higher level, a BMI of 45, so that with a perplexing twist of illogicality, patients now need to get fatter in order to qualify. It's as if people who are being treated to help them lose weight are being perversely incentivised to put on more weight.

"They have set the level so high that it isn't possible to qualify," the girlfriend says.

At Dr Taheri's afternoon weight management clinic, he has a number of these difficult conversations. This area of the West Midlands has the highest level of obesity in Europe, according to staff. A quarter of 11-year-olds are obese and at least 70% of them will end up as obese adults, Dr Taheri says. Patients come in for consultations every six months, and because it is six months since the guidelines changed, many are finding that they are no longer going to be able to get the treatment they were hoping for.

Uncomfortable conversations about rationed operations are likely to become a more regular part of doctors' work in the next few years, as the squeeze on NHS funding becomes more intense. Although the coalition promised to ringfence NHS funding, government spending on healthcare will remain flat until 2015, at a time when demand on the service is rising. The NHS was already committed to finding £20bn worth of savings (or "productivity improvements") by 2015 and, as a result, all parts of the NHS are under pressure to reduce costs. Imposing tighter limits on certain procedures, such as gastric bands, is one way money will be saved.

This week, the Guardian reported that waiting lists for tests and treatment are already beginning to rise all over the country, and staff at Heartlands know that they are entering a period of financial austerity. The Heart of England Trust, which embraces three hospitals across Birmingham (including Heartlands), has agreed to shave 4% from its £600m annual budget – equivalent to £24m – every year until 2015, and expects to cut 1,600 posts out of the total headcount of around 10,000.

For the moment the full force of the impending squeeze on costs has yet to be felt, erupting only occasionally in unexpected rationing. Dr Taheri says he describes himself as "a fairly mild-mannered, calm person", but he is increasingly angry about the new restrictions on treatment. "About 30% of the patients need things that we're not able to get them. This is going to be the challenge, to explain to patients that we can't do things," he says.

Another patient, Brian, 51, has also recently discovered he no longer qualifies for the bypass operation he has been waiting for. As he refreshes himself on his client's case history, Dr Taheri teases out details of his lifestyle and background, to get a sense of what might be making it hard for him to lose weight. Some of the questions are unexpected – about marriage, friendships; Dr Taheri sees obesity as a social condition. "Social environment is so important. Food is comforting when there's not much comfort in your life," he says.

Brian tells him he works nights in a call centre, which makes his eating-patterns irregular. He was abandoned by his parents, at the age of 11; he has been smoking 20 cigarettes a day since he was 14 and trying to lose weight for 26 years; when he's not working he's sleeping.

"What do you do for fun?" the doctor asks.

"What's fun again?" Brian replies, without smiling. As he talks, he rests his arms on his huge solid stomach; his limbs are thin, but he has the stomach of a woman about to give birth.

If he can find documentary evidence that he was once more overweight than now, that might help, Dr Taheri tells him. Brian thinks he once topped 24½st, and promises to look for medical papers that prove this. The doctor says he can recommend the operation, but he points out that his support no longer means that the PCT will fund the treatment.

"So even if your BMI is that level, they wouldn't necessarily fund it?" Brian's girlfriend, who has accompanied him, is struggling to understand.

"The problem is they changed the rules," Dr Taheri says wearily.

"What if he comes back and they say that the BMI now has to be 50 or 60?" his girlfriend asks. "Next year they will probably move the goalposts again, and again and again."

"It does make me feel really depressed, and then there's the whole spiral of depression," Brian tells him.

"I'm sorry," Dr Taheri says.

"No, it's not you."

The rationing approach may save money in the short term but in the longer term it will prove much more expensive, Dr Taheri warns, since patients will have to "fairly sick to get to the qualifying level". "These operations cost in the immediate term, but they pay off in three to five years," he says. Fitting a gastric band costs about £5,500, and a bypass operation costs £8,000 in Birmingham (or £14,000 in London).

Some of his patients lose their temper when they learn that an operation will no longer be possible, but it's usually because they think that the hospital is refusing them treatment. There has been such a surge in complaints that staff have changed the wording of the letter they send to patients, to make clear that funding decisions are not in their hands: "Although we are recommending you for treatment/referring you to see our surgeon, your funding may not come from the PCT."

The Heartlands clinic is the largest bariatric surgery centre in UK, but surgery is performed only on those for whom all other options have been explored and failed. Dr Taheri acknowledges that it is a controversial procedure but argues that the controversy is largely caught up in popular misconceptions, a failure to understand the dangers of obesity, and its association with strokes, paralysis and a higher risk of various kinds of cancer.

"People don't understand that [the patients'] quality of life is very poor, they have no sex life, no work. The people who come here are in big trouble," he says. "The indirect costs to the economy of not being able to work – people being on incapacity benefit – are much greater. Public opinion does not grasp what the problem is.

"I can see how my patients have suffered. There's so much judgment of people with obesity, but they're not going to McDonald's every day. It's usually a much more gradual process, the result of a couple of extra pieces of toast a day over 10 years," he says. He thinks possibly 30% of his patients have experienced some kind of profound trauma in their lives, and the eating is connected to the search for comfort.

The hospital has invested a huge amount of money transforming its diabetes clinic into a model of how these centres should be run, with the weight management clinics central to the service. There are dieticians on hand, foot clinics (to tend to feet damaged by the effects of diabetes), side-rooms where overweight patients come and spend the night to have their sleep patterns monitored. The clinic backs on to a research centre, and patients can benefit from participating in clinical trials. Since the clinic was reopened, with a £13m new building 18 months ago, all the fittings have been redesigned to suit the clientele, so that the examination beds are extra wide, and the chairs and the wheelchairs in the waiting room are made for bulky patients.

"When I first arrived here, three years ago, we had to push two or three chairs together, they'd be creaking," Dr Taheri says. "Patients had to wear two hospital gowns and tie them together; now we have the right size. Now there's more dignity."

The clinical director of the service, Professor Anthony Barnett, has seen the unit expand radically since he was appointed in 1983, and blames plummeting physical activity for the quadrupling of obesity rates over the past 25 years, from 6% of the total adult population, to 25%. The rise in type 2 diabetes, associated with obesity, concerns him more. "What is really worrying is that we are seeing it at a much younger age; it is no longer associated with middle age," he says.

"It is a tragedy that successive governments have not focused more on this problem. It has been called a time bomb and that time bomb is about to go off."

Historically, the Department of Health has failed to take sufficient interest in the issue, he says, although they are beginning to worry now that diabetes consumes 10% of the total budget, he says. "Diabetes isn't just a bit of a nuisance, it has horrendous health consequences."

Patients arrive at the clinic wheezing, limping, struggling with crutches, stress marked on their faces, in obvious pain as they move. A man with an enormous beer belly looks slim in comparison to most. These are silhouettes that might have attracted stares a couple of decades ago, but now seem unremarkable.

A woman in her 50s comes in to see Dr Taheri, accompanied by her daughter, who's in her 20s. Her daughter's shape echoes her own, a thin face, with unexpected rippling bulge around the stomach, like a rubber ring beneath her cardigan. Five weeks ago she had a gastric balloon fitted to quell her appetite, and she is finding it difficult to get used to it.

To begin with it was "horrendous. I  felt seasick," she says, and things have only slightly improved. "When I burp and pass wind the smell is absolutely horrendous. I'm so embarrassed. Even my grandchildren have cottoned on to it – they say, 'Quick, Granny's burped!' and they run away. It's been rocky but it's started to settle down now," she says. "I can't eat my favourite bread, or pasta and rice."

"You're making sacrifices for your quality of life," Dr Taheri tells her. "People hear about celebrities having them, and they think it's easy," he says later. "But it's not – it requires a real commitment, it's hard work."

A young Asian man comes in next with his mother. He is smiling, anxious, friendly and in a lot of pain. He has recently developed type 2 diabetes. He has no neck, his head melts into his shirt, his shirt slopes over the rest of his body, all sharp corners rounded, curving into each other.

"You have been coming here for a long time," Dr Taheri observes. "So what are we going to do?"

Saeed says he is finding it harder to cope physically. "I'm studying engineering, it's quite physical. It's hard to keep up. My body is aching all the time. My knees feel warm, my hips ache," he says.

"So you're 24, on statins, with diabetes . . ." The doctor tells it like it is, without reproach, but setting down the facts firmly.

"I live like a 70-year-old," says Saeed. He admits he's depressed by the sight of people in the waiting room. "That's my whole life ahead of me."

They discuss the possibility of taking part in a drug trial, and Saeed's eyes light up with a distant sense of hope. "I'm definitely interested in that – anything that will help," he says.

Some of the drugs Dr Taheri prescribes make some of his patients' problems improve, but have the side effect of boosting weight gain. He is also angry at the cost restrictions on his ability to prescribe the most effective drugs. "Patients are being poisoned with the quantity of the drugs they've been prescribed. The newer drugs are weight neutral, so don't prompt weight gain, but they cost four or five times the amount of the traditional drugs, so staff here are not able to prescribe them at will," he says.

Dr Barnett says: "There is a tension between the Hippocratic principle of doing the best for your patient and the health economics, where costs have to be constrained. That's much more pronounced than when I started my work." It's a short-sighted approach, he warns: "People are under pressure to budget for the next 12 months, but we should be looking at treatments over five or 10 years – thinking about how to prevent an amputation or kidney failure."

Dr Taheri meets Mike, 52, a coach driver, enormous all over, with a stomach the size of a small refrigerator. The outsize chair is swallowed up beneath his body. He lives alone with three cats and often works 15-hour days, from 6.30am to 9.30 at night. "You finish a day like that and it's hard to eat properly," he says.

A sleep test has shown that he has severe sleep apnoeia and is waking up an average of 35 times a night, so he's feeling exhausted and unwell.

Dr Taheri hasn't seen him before, so he runs through a series of questions designed to see how strongly he wants to lose weight and how motivated he might be.

"Why do you want to lose weight?" he asks.

"There's a bit too much of me," Mike replies flippantly, but Dr Taheri is stern.

"That's not a reason. Why do you want to lose weight?"

"I could end up being in a wooden box a bit sooner than later," he says. "I  would like to be able to walk around a bit, without getting out of breath. I've got the willpower of a dishcloth. I live by myself. When I do cook, I cook for three not for one. I'm bloody useless at portions." He says he has given up fizzy drinks in favour of squash, so Dr Taheri explains that squash may be just as bad.

"You're 52 but by weight you are 70 years old," Dr Taheri tells him. He draws a circle on a piece of A4 paper. "This should be the size of your plate." He draws three smallish ovals on the plate, and labels them: portions.

"These are your choices. It's not your fault, but it is your responsibility to do something," he says.

"I can only see you every six months, but you can email me information about how you're getting on," he says. He would like to be able to see his patients more regularly, to help keep them motivated, but funding constraints mean the appointments are every six months only.

It requires a huge effort for Mike to stand up. He limps out. Dr Taheri is uncertain about whether his patient has taken in the urgency of the need for change. Email contact is no substitute for the kind of stark conversation the two men have just had.

"If I had all the resources I need, I would see him every month," he says. "When I joined three years ago, there was one clinic a week, now there are eight clinics, and the staffing levels have not kept up with that . . . I don't have the follow-up appointments I'd like to do. You can only see people every six months because of a lack of staff . . . I am concerned."

All patient names have been changed, and pictures do not relate to the cases mentioned in this article.

• The following correction was printed in the Guardian's Corrections and clarifications column, Friday 15 July 2011. A feature about obesity (Big Trouble, 12 July, page 6, G2) incorrectly stated that body mass index – a mathematical indication of the relative weight-for-height of a person – is calculated by dividing a person's weight by his or her height. In fact it is arrived at by dividing a person's weight by his or her height squared [mass in kg/(height in m)2].