The hospital renowned as the birthplace of the National Health Service has announced swingeing cuts in an attempt to save itself from bankruptcy.

Managers at Trafford General Hospital in Manchester have declared £10m of cuts to clear the hospital's long running deficit and a predicted overspend of £7m next year.

Two wards of 38 beds are to close, 210 posts will go and the seven operating theatres are to be reduced to five. The Trafford Healthcare Trust last month was also forced to renew a loan of £3m from the North West NHS Strategic Health Authority to pay its bills.

On 5 July 1948 the hospital became the first in Britain to admit patients under the NHS. Aneurin Bevan, the Minister for Health, chose Trafford General, then called Park Hospital, to launch his creation.

But despite the injection of £43bn into the NHS over the past five years, Trafford General is now facing an uncertain future. Surrounded by three major teaching hospitals, it has lost out on patients and services to its larger competitors.

Neil Limsky, of Unison, said the hospital was paying for mismanagement in the past and there were now real fears about its future. "This is a failure of the Government's internal market," he said, adding: "We have always argued the NHS should not be run as a business – the fact Trafford has not succeeded as a business does not mean it is not needed as a hospital."

Fay Selvan, chair of the Trust's board, said it was concentrating on getting financial controls in place and was predicting a surplus of £500,000 this year.

A spokesman for the North West NHS Strategic Health Authority said: "Trafford General is going through what other trusts went through 12 months ago to get its finances in order."

A Tory health spokesman Stephen O'Brien said: "Despite the extra money going in, hospitals like Trafford are still prevented from getting on an even financial keel. It is a disgrace that in this 60th anniversary year of the NHS Gordon Brown should have fouled up the NHS budget so badly."

He added that Labour had returned "boom and bust" to the health service.

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