Most of St Bartholomew's hospital - originally listed for closure in the Tomlinson report - will be saved under the compromise plan. Ministerial sources have indicated that other hospital closures would be put forward as long-term proposals, rather than firm decisions.
Mrs Bottomley's statement on the reorganisation of London hospitals, expected in the next fortnight, will mark the third important U-turn since the election, following the climb-down on the closure of pits and the amalgamation of regiments.
In an attempt to deflect criticism of the compromise from the right of her party, Mrs Bottomley is expected to tell the annual conference of Young Conservatives in Southend tomorrow that more partnerships between the National Health Service and the private sector would help to improve services by cutting costs.
Mrs Bottomley will tell the Young Conservatives that more health functions should be 'market tested' to see if the private sector can provide them more cheaply than the NHS. Her call will, however, be open to attack by Labour as further evidence of creeping privatisation.
Mrs Bottomley will also deny that she is slowing down the Government's changes to the NHS.
She has come under fire from Cabinet colleagues for proposing to retain the health regions, but she is planning to tell the Young Conservatives that she intends to push ahead with other changes.
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