The troubled Mid Staffordshire Hospital Trust is in danger of being dismantled after health service regulator Monitor warned that its financial troubles could jeopardise the quality of care it provides.
The Trust - at which up to 1,200 patients are thought to have died between 2005 and 2008 because of sub-standard care - has racked up such huge debts that, even with £20 million handed over by the government last year it will not be able to provide safe care on a sustainable basis in the future.
While significant improvements have been made to the way the Trust is run, and there are no immediate concerns about the care patients are receiving, an independent investigation for Monitor has concluded that it is not clinical sustainable in its present form and "cannot break even without compromising future clinical services".
Without continuing cash support, the Mid Staffs Trust will not be able to pay its debts and would be deemed insolvent; in order to break even the Trust would need to make £53 million of savings over five years and still require a £73 million subsidy from the Department of Health over the period.
Experts are now looking at how services can be provided in a way which meets patients needs and remain sustainable, including wether the Trust can continue to run both its hospitals or "whether some services should be moved to existing or new providers in the area".
Findings of a public inquiry into the failings at Mid Staffs are expected to be published in the next few weeks. It is hoped that the report will help shed some light on why the Trust's serious problems were not picked up on sooner, and make recommendations on how such a situation can be avoided in future.