YORK health chiefs will decide in the next few weeks whether or not to apply for Foundation Hospital status - as Health Secretary Alan Milburn heads for confrontation with Labour backbenchers over the controversial plans.

Simon Pleydell, chief executive of York Health Services NHS Trust, which was awarded three-star status in Government performance tables, said he was waiting for the detailed guidance to arrive on his desk before he discussed the move with board members and partner organisations.

If the trust decided to press ahead with plans to become one of the country's first "super" hospitals, with freedom from Whitehall control, an application will be submitted in the new year.

Mr Pleydell said: "There are clearly attractions in the new Government policy for Foundation Hospital Trusts. These are not just in terms of the freedoms being promised to individual organisations, but also from the closer links into the local community.

"We need to further understand the detail and benefits to patient care. We need to have some discussion with local stakeholders, particularly our partners in local health and social care, commencing with the Selby and York Primary Care Trust and the City of York Council."

Labour rebels, led by former Health Secretary Frank Dobson, are insisting the proposals for foundation hospitals would create a "two-tier" NHS.

Alan Milburn pledged foundation hospitals would not be allowed to poach staff or cut prices to attract business from elsewhere in the NHS and there would be a strict limit on the number of private patients. But 83 Labour MPs immediately declared they were unsatisfied, by tabling a House of Commons Early Day motion. Mr Dobson, who has close links to York, said: "The proposal will restore competition, setting hospital against hospital, as happened during the previous regime, that we got rid of with almost universal support of everyone in the health service."

However Mr Milburn, who said the first foundation hospital would be in place by the end of 2004, said the new trusts would "usher in a new era of public ownership where local communities control and own their local hospitals".

If York gains the status, it will be run by a new management board - a majority of which will be elected by local people and recent patients. Meanwhile, Mr Milburn announced a 28 per cent increase in funding to Selby and York Primary Care Trust, which funds local health services, over the next three years. The budget will be £216.2m next year, rising to £255.8m by 2005/6.

Scarborough, Whitby and Ryedale's budget increases by 30 per cent to £166.1m by 2005/6.

Craven, Harrogate and Rural District PCT enjoys a 28 per cent increase, taking the total to £197.1m in three years' time.

Updated: 11:30 Thursday, December 12, 2002