It has been revealed that the Peterborough Hospital was given a go ahead to build a new health unit despite warnings that the hospital will not be able to finance its operations.

The hospital, which is now loosing £44m a year, had received an approval for a private finance deal for building a new unit even as there were warnings that the project was unsustainable for the hospital. A report, commissioned by the hospital regulator, Monitor has shown that concerns were raised aganst eh implementation of the project.

Both the Treasury and the Department of Health had given approval for the unit despite several serious warnings. The project now costs £22m a year to service to the hospital. Monitor had found Peterborough Hospital was among the hospitals that breached the terms of its authorisation and had warned previous year that a turnaround plan has not been implemented in time.

Monitor warns that Peterborough is at a high risk of financial failure and will be forced to reduce the service it offers and even reduce staff to become sustainable.

It is believed that 30 NHS trusts could be forced to merge, devolve services into the community and make jobs cuts as part of a radical restructuring of hospital care.