The Health Secretary Andrew Lansley has written a letter to the board of the South London Healthcare Trust, with a warning that a special administrator will be commissioned to take over the trust.

The trust, which runs Queen Mary Hospital in Sidcup, the Queen Elizabeth Hospital in Woolwich and the Princess Royal Hospital in Bromley, will be taken over by a special administrator having powers to sack staff and reduce services at the units aimed at cutting costs.

This is the first case in which, the powers have been used by the authorities and is likely to result in reductions in staff and services. The trust has run into a huge debt problem following two large PFI deals that costs £61m in interest payments a year.

The announcement of takeover by the administrator comes just days after trust's chief executive Dr Chris Streather announced his resignation.

Mr Lansley worte in the letter that, "A central objective for all providers is to ensure they deliver high quality services to patients that are clinically and financially sustainable for the long term. I recognise that South London Healthcare NHS Trust faces deep and longstanding challenges [but] there must be a point when these problems, however they have arisen, are tackled."

He said that understands that the use of powers to reduce staff will be unsettling but pointed out that it is important for having sustainable hospital services in south London area.