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Today 1,000 doctors at St Bartholomew’s and the Royal London hospitals, including 450 consultants, have signed a letter to The Times protesting at government plans to renege on a £1.15 billion deal to rebuild the two hospitals.

The Department of Health failed to sign off on the scheme before Christmas and has called for a review and possible exclusion of Bart’s in an attempt to cut costs.

But The Times understands that ministers are considering scaling back or even cancelling about ten schemes, including redevelopment planned in Bristol, Liverpool and Newcastle.

They are concerned that hospitals that are due to be rebuilt under the controversial Private Finance Initiative will not be able to service their debts. The initiative involves private companies raising the capital to redevelop hospitals that trusts pay off through service agreements over 25-year periods.

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There's also a smaller private finance scheme that did go ahead which is encountering big problems:

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Under PFI, private companies build and run hospitals, with NHS trusts then repaying them over 25 to 40 years. But there is growing concern about the ability of trusts to bear these huge annual costs, especially when the government's new payment-by-results policy means hospitals no longer have a guaranteed income.

The problem was highlighted last month, when the Guardian revealed that the Queen Elizabeth hospital trust in south London, a flagship PFI scheme which was completed four years ago, had become technically insolvent as its fixed interest rate debt rises to a predicted £100m by 2008-09.

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http://politics.guardian.co.uk/publicservices/story/0,11032,1687434,00.html