Daily coronavirus tests will be offered to close contacts of people who have tested positive in England, as a way to reduce the current 14-day quarantine.
Prime Minister Boris Johnson said people will be offered tests every day for a week - and they will not need to isolate unless they test positive.
He also said rapid tests will allow every care home resident to have up to two visitors tested twice a week.
Labour welcomed increased testing but raised concerns over test-and-trace.
The chairman of the Independent Care Group which represents independent care homes, Mike Padgham, said the government was being "rather ambitious".
Announcing the government's Covid-19 winter plan, Prime Minister Boris Johnson said repeat testing will be expanded for people in England whose close contact has tested positive for Covid-19, in a bid to cut the 14-day quarantine.
Currently those deemed to have been in contact with a Covid-positive person are required to isolate for 14 days.
But, under the new plan, people will be offered the opportunity to be tested every day for a week and, as long they test negative, will be able to go about their normal life.
The prime minister suggested the plan would begin in Liverpool this week - although the city council said plans were yet to be finalised.
"If successful this approach will be extended across the health system next month and to the whole of England from January," he added.
Mr Johnson also said that mass testing will be introduced in all England's tier three areas, the highest alert level.
It follows a pilot of mass testing in Liverpool, which used rapid "lateral flow" tests. These are swab tests which give results within 30 minutes.
Mr Johnson said: "If it works we should be able to offer those who test negative the prospect of fewer restrictions, for example meeting up in certain places with others who have also tested negative."
Earlier, Health Secretary Matt Hancock said the number of cases in Liverpool had "gone down far more than I would have hoped for, frankly" since the mass testing was introduced.
"The number of cases in Liverpool is now down by more than two thirds from when we started that process," he told BBC Radio 4's Today programme.
But Labour leader Sir Keir Starmer said: "Now I know the PM will talk about increased testing, mass testing - that's welcome - but it's only part of the story because the other two parts: trace and isolate, are not fit for purpose.
"Sage advised, and continues to advise, that for trace and isolate to be effective the percentage of contacts traced needs to be about 80%. It's currently nowhere near that level."
Care home testing
On testing for care home visitors, Mr Johnson said: "We are beginning to deploy these tests in our NHS and in care homes in England, so people will once again be able to hug and hold hands with loved ones instead of waving at them through a window."
The testing of care home visitors is already being piloted in 20 care homes in Hampshire, Devon and Cornwall.
Mr Johnson told MPs this will be rolled out to every care home resident by the end of the year.
He said care workers who look after people in their own homes will also be offered weekly tests - as well as, from December, workers in food manufacturing, staff in prisons, and those delivering and administering Covid vaccines.
The idea of scrapping the isolation period for close contacts is an interesting development.
Other countries have moved to shorter periods of isoaltion in the acknowledgement that large numbers of people are not completing their 14-day isolation if they are a close contact.
The 14-day timeframe was introduced as that is the length of time in theory incubation and the development of symptoms can take.
But the problem when infection rates are high is that people can find themselves having to come in and out of isolation on a regular basis.
What is more, there is little evidence of how many infections the isolation of close contacts is actually preventing.
The result is that compliance is low. NHS Test and Trace estimates half of people asked to isolate follow the rules, although other studies have suggested it is even lower.
Some have called for more pragmatism, arguing a shorter isolation will be more effective in controlling the spread of the virus because of greater compliance.
Scrapping the need to isolate altogether while linking it to regular testing is a different way of approaching it.
Concerns have been expressed about the accurateness of the rapid tests being used - research has suggested they may only pick up half of positive cases.
Repeating the test over a number of days could help tackle this.
Earlier, Mr Hancock told Today the plan to test all care home visitors would make a "massive difference" although it would be a "huge challenge".
There have been strict restrictions on visiting in many care homes over the last eight months, due to the pandemic.
Asked what extra support care homes would get, Mr Hancock said: "We're going to put in place the protocols to allow it to be done.
"I don't think it takes extra staff to allow visitors to test. What I'm telling you is how we can make this happen."
Care home boss Mr Padgham - who runs four care homes - said: "Generally in principle we welcome it, there's lots of ifs and buts to go through yet."
"Depending on what type of test it is, if it's a lateral flow test which the results come back in 30 minutes we'll probably going to have to employ someone particularly to do that in each home.
"Which is going to be, not easy, from our perspective."
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