THE Government has given Worcestershire Royal Hospital three years to repay a massive £8m debt.

The announcement ends fears finance bosses would be ordered to get back into the black by the end of the current financial year.

MPs and patients groups had warned this could lead to job cuts and the axing of vital services.

The hospital was thrown the lifeline by Health Minister John Hutton in the House of Commons yesterday.

Under pressure from Mid Worcestershire Tory MP Peter Luff, he said: "NHS regulations require a Trust to restore a financial balance within three years of a deficit arising.

"That is the time within which the Trust would operate."

Mr Hutton added: "The West Midlands South Strategic Health is currently working with the Trust to ensure a return to financial balance at the earliest possible opportunity.

"This will be helped by an increase of over 30 per cent in the resources available to the South Worcestershire Primary Care Trust in the period 2003 to 2006."

Mr Luff welcomed the fact the hospital would not have to come out of the red this year.

The NHS Acute Trust has planned savings of £9m, including cuts in managerial posts. But finance bosses are not convinced they will be able to get back into the black this year.

"The doctors and nurses can breathe a little easier, but we are not out of the woods yet," Mr Luff said.

"We always knew we would have to pay back the overspend," said a spokesman for Worcestershire Acute Hospitals NHS Trust.