Creditors of NHS Foundation Trusts that go bust could be left with nothing.

Though the Government has suggested that Health Secretary Alan Johnson would bail out suppliers, it has refused to guarantee this.

After many years trying to work out an insolvency regime that would give creditors similar rights to those of commercial organisations, ministers have thrown in the towel.

The NHS or the Department of Health 'might take on this debt', said the department, depending on the circumstances.

That would leave creditors in a no-man's land, with neither the certainty of Government backing nor the ability to make claims through a normal insolvency process.

Of the 225 NHS hospitals and mental health trusts in England, 113 have foundation status, meaning they are free to borrow money and enter commitments such as leasing equipment.



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