Successful hospitals are to be freed from Government control under radical new plans outlined by Health Secretary Alan Milburn today.

And the running of badly-performing hospitals will be put out to tender, with bids invited from top-performing trusts, the private sector or charities.

The future of each hospital will depend on the number of stars it gets under the Government's rating system.

The two hospital trusts in East Sussex had mixed fortunes with Eastbourne Hospitals NHS Trust getting two stars, showing it was performing well but had not reached consistently high standards.

Hastings and Rother NHS Trust achieved only one star, meaning there was cause for concern.

The trusts are due to merge in April and will be working to get three stars, when they will be given the chance to opt out of Whitehall control.

If they fail and go down to a zero rating, they risk being taken over by a private or charitable management team.

A spokesman for Eastbourne Hospitals said: "We would like to hear more details about these proposals before making any decisions on the future."

Brighton Health Care NHS Trust received a zero star rating, making it one of the poorest performing trusts in England.

Chief executive Stuart Welling was given three months to turn its performance around or face it being taken over by a new management team from a successful trust.

He will find out soon if he has managed to save his job.

If he is forced out and the new team manages to bring the trust up to scratch and get three stars, it could eventually opt out of Whitehall control.

Mr Milburn wants to allow good managers greater autonomy within the NHS to create "foundation hospitals".

Managers of three-star hospitals will be given the opportunity to set up not-for-profit companies to run their trusts free from government interference.

Although they would continue to be part of the NHS and subjected to national standards and external inspections, managers would be given independence in all other areas, including staff pay and conditions.

Mr Milburn said the NHS was Britain's "last great nationalised industry" in which patients were expected to be grateful for what they received.

He said: "That model is untenable for the 21st century. The NHS has to grow up and be part of this century rather than the last.

"The job of government should not be to run the system but to oversee it. We want greater community ownership and less state ownership, leading to greater diversity and plurality in local services.

"We now have a clear set of frameworks and standards in place, it is time to let go."

Draft proposals are expected to be published within three months.

Dave Prentis, general secretary of Unison, dismissed Mr Milburn's plans.

He said: "What is needed is more money and investment going into the NHS and the staff who provide the services.

"The Health Secretary talks about freedom for managers. Is it freedom to double their salaries at the patients' expense, freedom to drive down the pay and conditions of staff?"

Bob Abberley, assistant general secretary of Unison, said the proposals put forward by Mr Milburn were not in the NHS plan.

He said: "The hospitals Mr Milburn is talking about giving freedoms to have become successful under the NHS.

"Where is the evidence that this will improve patient care?"

Tory health spokesman Oliver Heald accused Mr Milburn of panic.

He said: "This seems to be a back of an envelope job - certainly we have never heard anything about this in the NHS plan or the Act of Parliament which is supposed to be the great reform."

A code of conduct is being launched to stop managers responsible for "massaging" hospital waiting list figures walking into new NHS jobs.

A National Audit Office report recently showed nine NHS trusts were involved in "inappropriate adjustment" of lists.