VITAL cash bailouts to rescue East Lancashire's hospitals from a beds crisis will not be available if they are granted foundation status.

East Lancashire Hospitals NHS Trust has already received a £900,000 handout, and is set to receive more to help plug the latest £2 million black hole in its budget.

But the hospitals will no longer be able to ask for the extra funding from primary care trusts NHS East Lancashire and NHS Blackburn with Darwen, if it passes the final stage of the foundation trust process in February.

Blackburn health watchdog Councillor Roy Davies urged bosses to "get the house in order" before pursuing foundation status, while Burnley councillor Darren Reynolds warned of "a very real chance that the hospitals could go bankrupt."

Hospital bosses have promoted foundation trust status, saying it will improve services by allowing more financial flexibility and giving the public a bigger say.

Nominations are being taken for elections to the new foundation trust board of governors, and the process will be complete if the Department of Health gives it official backing in February.

But the added financial freedom relates only to the private sector.

The trust will be able to apply for more private funding and commercial loans, and keep any profit it makes, but will have to give up rights to ask other NHS bodies for more money.

The first £900,000 from the PCTs has paid for extra beds at the Royal Blackburn Hospital, where A and E services have been under fire and chief executive Marie Burnham admitted wards were "stuffed to the gills".

The exact figure of the next lump sum has not yet been decided, but directors of NHS East Lancashire have already provisionally agreed help towards the £2 million costs of Burnley General Hospital's new temporary theatre, and overspends on surgery improvements and agency staff.

NHS East Lancashire's chief executive David Peat told a board meeting there would be no further funding requests if the hospitals trust reached its foundation goal.

Councillor Davies, chairman of Blackburn with Darwen's health scrutiny committee, said Miss Burnham "stands the best chance in years" of stabilising finance and care issues, but added: "Your gut feeling is still that they should make sure the house is in order before going for foundation."

Councillor Reynolds, of the It's Our NHS campaign, added: "Foundation trusts have got themselves in real messes before, and if East Lancashire goes down that road at this stage, there is a very real chance they could go bankrupt."