A private sector deal to build a series of NHS independent treatment centres has collapsed.

The Department of Health confirmed it had de-selected the consortium named as the preferred bidder for the London chain of hospitals.

Anglo-Canadian has been dropped from bidding for the sites which it was hoped would treat thousands of patients across the capital.

Negotiations were called off after the consortium was unable to offer a package that the DoH considered value for money, the Health Service Journal reported.

A spokeswoman would not specify the reason for talks falling through but detailed a number of reasons a preferred bidder could lose out on a contract.

She said: "It can be when you start looking at the detailed contract requirement, both parties feel that they are not suitable for whatever reason."

Anglo-Canadian, which includes a number of Canadian healthcare firms, was appointed preferred bidder for the London chain of hospitals last year.

The chain comprises Barnet and Chase Farm Hospitals, King George Hospital in Ilford and the Royal National Throat, Nose and Ear Hospital in King's Cross.

The contract was to provide orthopaedics and general and specialised surgery for five years, treating approximately 30,000 patients a year.

In a statement, the DoH said the preferred bidder status granted to Anglo-Canadian was no guarantee a contract would be awarded to that organisation.

The DoH spokeswoman would not confirm when asked whether the options now being considered included cancelling the contract altogether.

Friday April 16, 2004