Instead, St Thomas's is to become the acute and specialist site while Guy's, with its pounds 140m state-of-the-art Philip Harris House, will be left as a medical school with day surgery, research and outpatient facilities - but with plans for King's College to eventually move there.
Question marks still remained last night over whether the huge sums of money needed to move King's College to Guy's will be available, and a group of Guy's consultants last night vowed to fight the downgrading of their hospital.
The decision to leave St Thomas's the victor in the London hospitals' battle came as Mrs Bottomley revealed a string of changes across the capital that included allowing the Royal Marsden cancer hospital to remain in London but leaving it at the mercy of the NHS market. If it can win enough contracts it will survive.
Despite talk of tough decisions, the Secretary of State for Health ducked out of supporting plans by the South West Thames Regional Health Authority to downgrade Queen Mary's Hospital, Roehampton, leaving the health purchasers in the area with a set of sums that on their previous arguments will not balance.
And decisions have yet to be taken on the merger of the Hammersmith and Charing Cross hospitals.
Mrs Bottomley sweetened the pill for London with a doubling to pounds 85m of the cash available next year to improve primary and community care, while family health service authorities are being given new powers to acquire and develop land and provide bigger grants to family doctors to boost services.
As part of the package, the Hospital for Sick Children in Great Ormond Street will not be forced to merge with University College Hospital, and a four-year deal has been done that will allow Great Ormond Street and the other London post- graduate hospitals to have a gentler introduction to the NHS market, with their research costs protected.
St Thomas's appears to have won because of its location, opposite the House of Commons and Whitehall and close to Buckingham Palace. Mrs Bottomley told the Commons that the decision had been finely balanced, but that St Thomas's 'strategic position and accessibility' had counted.
Medical charities and trust funds that have put up more than pounds 40m of the pounds 140m cost of the as yet unopened Philip Harris House, which increasingly looks like a monumentally costly white elephant, might 'have grounds for asking for their money back', Mrs Bottomley conceded.
She hoped, however, that up to 80 per cent of the building may be used for its original purpose - a hi- tech hospital wing.
King's College and the United Medical and Dental School expressed serious worries last night about the high costs of the new merger proposal, the medical school warning of 'extremely serious' effects on teaching and research if it failed.
Mrs Bottomley insisted Guy's was left with an 'attractive vision' as 'a high-quality health and academic campus'.
David Blunkett, Labour's health spokesman, challenged whether there was room for such closures and rationalisations when waiting lists were rising and GP numbers in London falling.
Other parts of yesterday's package will see what is intended to be a world-rated neurological centre created at King's College Hospital and the Maudsley, with the Brook Hospital expected in time to close as Greenwich negotiates to buy the Queen Elizabeth Military Hospital in Woolwich.
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