Ministers are considering whether homeopathy should be put on a blacklist of treatments GPs in England are banned from prescribing, the BBC has learned.
The controversial practice is based on the principle that "like cures like", but critics say patients are being given useless sugar pills.
The Faculty of Homeopathy said patients supported the therapy.
A consultation is expected to take place in 2016.
The total NHS bill for homeopathy, including homeopathic hospitals and GP prescriptions, is thought to be about £4m.
How homeopathic pills are made
Homeopathy is based on the concept that diluting a version of a substance that causes illness has healing properties.
So pollen or grass could be used to create a homeopathic hay-fever remedy.
One part of the substance is mixed with 99 parts of water or alcohol, and this is repeated six times in a "6c" formulation or 30 times in a "30c" formulation.
The end result is combined with a lactose (sugar) tablet.
Homeopaths say the more diluted it is, the greater the effect. Critics say patients are getting nothing but sugar.
Common homeopathic treatments are for asthma, ear infections, hay-fever, depression, stress, anxiety, allergy and arthritis.
But the NHS itself says: "There is no good-quality evidence that homeopathy is effective as a treatment for any health condition."
The Good Thinking Society has been campaigning for homeopathy to be added to the NHS blacklist - known formally as Schedule 1 - of drugs that cannot be prescribed by GPs.
Drugs can be blacklisted if there are cheaper alternatives or if the medicine is not effective.
After the Good Thinking Society threatened to take their case to the courts, Department of Health legal advisers replied in emails that ministers had "decided to conduct a consultation".
Officials have now confirmed this will take place in 2016.
Debate
Simon Singh, the founder of the Good Thinking Society, said: "Given the finite resources of the NHS, any spending on homeopathy is utterly unjustifiable.
"The money spent on these disproven remedies can be far better spent on treatments that offer real benefits to patients."
But Dr Helen Beaumont, a GP and the president of the Faculty of Homeopathy, said other drugs such as SSRIs (selective serotonin reuptake inhibitors) for depression would be a better target for saving money, as homeopathic pills had a "profound effect" on patients.
She told the BBC News website: "Patient choice is important; homeopathy works, it's widely used by doctors in Europe, and patients who are treated by homeopathy are really convinced of its benefits, as am I."
The result of the consultation would affect GP prescribing, but not homeopathic hospitals which account for the bulk of the NHS money spent on homeopathy.
Estimates suggest GP prescriptions account for about £110,000 per year.
And any decision would not affect people buying the treatments over the counter or privately.
Health Secretary Jeremy Hunt was criticised for supporting a parliamentary motion on homeopathy, but in an interview last year argued "when resources are tight we have to follow the evidence".
Minister for Life Sciences, George Freeman, told the BBC: "With rising health demands, we have a duty to make sure we spend NHS funds on the most effective treatments.
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