NHS hospitals in England and Wales are facing growing debts that could lead to cuts in health care, according to a survey by the Conservative Party.

The research into the funding of hospital trusts found that, despite government injections of extra cash into the health service, the finances of many hospitals have worsened in the past year. The survey of 40 trusts by the Tories showed that 23 were in the red by the end of this financial year, with combined debts of over £125m.

Liam Fox, the shadow Health Secretary, claimed yesterday that the debt would affect patient care and could lead to fewer operations. "The situation has deteriorated very markedly over only one year," he said. "Deficits from the previous year must be cleared from the current year's budget, with inevitable reductions in services offered."

This marks a sharp increase from 2001-02 when, according to official Government figures, only 19 out of 318 trusts had deficits of more than £1m, and total debts were below £70m.

The study, by Chris Grayling MP, a shadow health minister, includes North Bristol NHS hospital trust, which has a projected £44.3m deficit, according to the survey.

John Reid, the Health Secretary, said the Tory figures were not cast iron and a result of "speculation". A spokesman for Mr Reid said: "The Tories cannot paint an accurate picture, which will be available when the official figures are published this autumn."

The Tories will today attack the Government for failing to meet its targets on the NHS. Research by Michael Howard, the shadow Chancellor, found that the government has failed to meet up to 50 per cent of its public service targets.

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