A LAST-minute hitch is delaying the start of work on a £96 million 'super hospital' in Blackburn.

A behind-the-scenes wrangle between the hospital trust's private sector partner Balfour Beatty and an agency in the City has delayed the issue of a bond required to bring in investors.

Because of the size of the project, the bond needs the backing of two of the City's independent rating agencies.

Only one of the two has given the necessary 'investment grade rating' which will bring a flood of interest from investors looking for a guaranteed return.

Balfour Beatty's financial advisors Deutsche Bank, are working with the other, Moodies, to resolve the matter but they have so far refused to give the necessary rating because the bond failed one of their tests.

The last board meeting of Blackburn, Hyndburn and Ribble Valley Healthcare Trust was told it could put back building work by around a month.

On April 1, the Blackburn trust officially merges with Burnley Healthcare Trust to form East Lancashire Hospitals Trust.

Acting chief executive John Dell said: "It's nothing to panic about. It was hoped the deal would be completed before this board disbanded but, unfortunately, that will no longer happen.

"I have a meeting with Balfour Beatty this week . They are coming up with a solution and it may take an extra few weeks or a month to sort out.

"After that's concluded building work will begin in one to two weeks."

The development is taking place under the Private Finance Initiative where the builders will pay the capital costs and the trust will repay it over 35 years.

Board chairman Ian Woolley said: "This deal is still very much alive and affordable."

Some preliminary work has already begun on fields east of the hospital site at Queen's Park, removing hedgerows and clearing ground.

Also, several site works liaison meetings have been held in advance of construction to clear the way for an immediate start when the go-ahead comes through.

An extra £10million of features have been added to the scheme to bring all hospital services in the town to the site. Previous estimates put the building work, due to be completed in 2006, at £86million but health trust bosses in Blackburn have expanded plans further.

New features include a new cardiac catheter laboratory, allowing some heart operation procedures currently undertaken in Blackpool to be carried out locally.

A new accident and emergency department is also planned which will be able to deal with 70,000 admissions a year.

That is twice as many as the current unit at Blackburn Royal Infirmary.

Other benefits of the new site include an extra 377 in-patient beds and new intensive care and high dependency units.