Doubts over Paddington health plan

The future of Paddington Health Campus is in the balance today, with ministers increasingly unhappy with a trebling of cost estimates.

Sources close to the ?1.1 billion private finance initiative project say its business plan has already been informally rejected.

The campus would have combined an Imperial College institute with new buildings for St Mary's, Royal Brompton and Harefield hospitals. These were supposed be completed in 2012 for about £300million.

But the final straw appears to have been a ?148million deal to buy a 3.2-acre site from the Paddington Development Corporation, controlled by contractors Multiplex and David and Simon Reuben.

This would cost £9.1 million a year until 2008, with a further £99 million from proceeds of the sale of the existing hospitals. The Department of Health is understood to have told hospital trusts it dislikes both the high price and the risks of the land deal.

Julian Nettel, chief executive of St Mary's NHS Trust, said: "We are in intense discussions with the DoH over this deal. The entire project is de pendent upon it happening."