An NHS hospital trust struggling under a heavy burden of debt and bed pressures has appointed a new chief executive to help end its crisis.

Kim Hodgson takes over at debt-ridden East Sussex Hospitals NHS Trust on October 10 on a salary thought to be at least £130,000.

She succeeds Annette Sergeant at a time when the trust, which runs the Eastbourne District General and the Conquest Hospital, St Leonards, faces mounting problems.

The trust, which gained one star from the Healthcare Commission in its annual performance ratings, is almost £3 million in the red.

It has debts from last year and is already overspent, meaning it must save £17 million by the end of March to balance its books.

The crisis has led to fears of job cuts. In addition, there has been a long-running acute bed blocking problem said to be one of the worst in England, plus damaging allegations of bullying.

The appointment of Mrs Hodgson without the job being advertised has raised serious questions about her predecessor, Mrs Sergeant.

Rumour has surrounded the future of 51-year-old Mrs Sergeant for months, with reports she had left the trust with a £500,000 payoff.

Mrs Sergeant has been off since mid-June, with director of finance David Townsley acting as chief executive in her absence.

However, officials yesterday insisted she was still employed by the trust. Trust chairman John Lewis said: "Annette Sergeant remains in the trust's employment but is absent for personal reasons.

"We can make no further comments on this situation until we have completed the discussions.

"Meanwhile, we have agreed to pursue discussions with others about the leadership of the trust and I am therefore happy to announce Kim Hodgson's appointment."

Eastbourne Conservative MP Nigel Waterson yesterday expressed his "serious concerns" over the appointment.

He said: "In what circumstances did Annette Sergeant cease to be chief executive and what functions is she currently performing while still employed by the trust? Does she remain on full salary? Will the details of any severance package be placed in the public domain?

"Is it the case Ms Hodgson was appointed without the post being advertised or normal recruitment procedures being followed? Were the Nolan Rules for public sector appointments observed? If not, why not?

"I shall be seeking an early discussion with the chairman of the trust to obtain answers to these important questions and to discuss the severe financial crisis which faces the trust."

Mr Waterson said he hoped a new leader would end the trust's troubles and added: "I naturally look forward to working with the new appointment to tackle the major problems in our local NHS and I welcome the fact our hospitals trust is no longer rudderless at this difficult time."

Hastings and Rye Labour MP Michael Foster also plans to meet Mr Lewis to discuss the basis of Mrs Sergeant's departure as chief executive.

Trust officials welcomed the appointment of Mrs Hodgson, currently deputy chief executive and director of operations at East Kent Hospitals NHS Trust.

Mr Lewis said yesterday: "Her experience and leadership will play a vital role in developing the trust in the years ahead."

Mrs Hodgson said: "I'm delighted to have been asked to lead the trust and I look forward to meeting and working with staff at the trust.

"I am very confident the trust has the capability to rise to the challenges it faces."