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An NHS trust covering part of Surrey and south London has agreed it cannot become a foundation trust in its current form.

Epsom and St Helier NHS carried out a review after the government said all NHS hospitals should become foundation trusts by March 2014.

All non-foundation trusts were expected to have a plan in place by early 2011.

Samantha Jones, Epsom and St Helier NHS chief executive, said the trust was not financially viable in its current form.

'Credible plan needed'

She said the trust had balanced its books for the past three years but was not financially viable following forecasts of income from primary care trusts, and needed to explore alternative options.

She said: "People will of course ask how this decision will impact on our plans to spend millions of pounds redeveloping both Epsom and St Helier hospitals.

"As such, I would like to reassure them that, whatever the final outcome, we are still fully committed to both schemes."

She said the trust needed to create a credible plan for its hospitals to achieve foundation status and needed to agree final options as quickly as possible.

Foundation trusts are accountable to local people and have greater freedom from government control.

The trust owns and runs Epsom Hospital in Epsom and three hospitals in south London - St Helier Hospital, Queen Mary's Hospital for Children, and Sutton Hospital.

There is a series of options: