The chief executive of a hospital that paid more than £1,000 for one day's work by an agency nurse said yesterday urgent measures were needed to prevent agencies exploiting the staff shortage in the health service.

The Princess Royal Hospital in Haywards Heath, West Sussex, paid the sum to Thornbury Nursing Services for supplying a specialist nurse to cover a 12-hour shift during the August bank holiday this year. Thornbury specialises in supplying nurses to hospitals at short notice and charges premium rates for its service. The bank holiday rate for a specialist nurse is £84.95 an hour, equivalent to £1,019.40 for a 12-hour shift. Of that, the nurse would be paid £576, with the remainder going to the agency.

Stefan Cantore, chief executive of the hospital, which ran up a £638,000 bill for agency nurses last year, said the present system was unsustainable. He said: "The decision to employ agency nurses is based on patient need. At the same time we cannot afford these rates.

"The agencies see a commercial opportunity. They are clearly exploiting a difficulty in the NHS at this time.

"We need to come up with a solution so we don't have to rely on the market and can squeeze them out as soon as possible."

The £1,000 payment was disclosed during a Commons adjournment debate by Nicholas Soames, MP for Mid-Sussex, who described the situation as "utterly outrageous".

A report by the Audit Commission, published in September, found nurses tempted by high rates of pay – which could double their NHS salaries – were being lured from NHS trusts to join agencies offering flexible hours and less stress.

One in 10 of all shifts is worked by temporary staff, some of whom are supplied by agencies and the remainder by trusts' own "banks" of nurses that are on call. The increasing number of temporary nurses on NHS wards was putting patients at risk, the Audit Commission said.

Spending on agency nurses rose by one third last year and has trebled in the past five years to £360m.

Mr Cantore said spending on agency nurses at the Princess Royal had doubled in a year since agencies had upped their rates to attract nurses from the trust's own bank. "We were not expecting the increase in rates and we have seen nurses moving from our bank to join the agencies," he said.

Shortages at the Princess Royal were worst in hi-tech departments such as neurosurgery, where an increase in emergency admissions had led to a surge in demand for nurses in the intensive care unit. In addition, one in five of the hospital's beds was blocked by elderly patients awaiting discharge because no care home place could be found for them. "The only way we could cope was to open more beds, which meant more nurses, some of whom had to come from agencies," Mr Cantore said.

The Department of Health announced in September that it was expanding the NHS in-house recruitment agency, NHS Professionals, to 50 new sites to compete with the commercial agencies. Hazel Blears, a Health minister, said: "We are starting to plug the gaps because there will always be times of high demand where we need to bring more capacity into the service."

A spokesman for the Mid Sussex NHS Trust said: "The use of expensive agency staff is a last resort and the safety of patients and quality of care is our main concern."