THE SURVIVAL of the Nuffield Orthopaedic Centre, Oxford, as an independent health trust has been dealt a major blow.

The world-famous specialist hospital may see its services taken over by private companies or another NHS trust, as worrying options for its future were spelt out this week.

Lingering hopes that the NOC might be allowed to continue as an independent organisation were all but dashed by news that it cannot bid for foundation trust status. It was deemed not to have the "financial stability" to go forward.

Instead, the troubled hospital faces the prospect of merging with a bigger trust, or even a private health provider.

It sparked fears that treatments that have established the NOC as a world leader in treating chronic bone conditions could be lost.

The NOC had been hoping a cost-cutting plan would establish its long-term financial viability. It has also been spearheading a national campaign for more Government funding for specialist orthopaedic hospitals.

But the South Central Strategic Health Authority has announced that it is to ask other NHS trusts and private health companies to produce business models for services provided at the Headington hospital.

The authority made clear it wants to "assess the financial viability of the NOC's services" within a larger organisation.

The NOC's chief executive, Jan Fowler, said she feared for "last-resort services" to save limbs and treat complex conditions like bone cancer.

She told the NOC board: "The South Central SHA has determined that the NOC does not have a financially-viable future as an independent organisation."

She warned that service providers taking over would be under pressure to generate a financial surplus.

"They are likely to be disinclined to invest in loss-making, last-resort specialist services, thus creating inherent long-term risks to those services," she said.

The chief executive said integrating the NOC with another organisation "via merger or acquisition" would not address the key issue of Government underfunding for complicated orthopaedic services.

NOC board member Eva Blacklock, of the Patient and Public Involvement Forum, said: "I believe the people of Oxfordshire will rise up to protest in their thousands if anything happens to the NOC."

Sue Woolacott, of the NOC Patient Panel, said the NOC provided the "most superb orthopaedic service that anyone could ask for".

But she said that she was alarmed that key decisions were being made about the NOC's future without consulting patient representatives.

Ms Woolacott added: "We cannot see any of the things that the SHA is thinking of as solving what we consider to be the main problem - who is going to pay for what the NOC does?" Options for the NOC set out by consultants KPMG include merging with another orthopaedic trust and "a partnership with the private sector or possible merger with a private provider".

The future of the NOC will be further complicated because the Headington hospital recently embarked on a major £42m building development scheme and has borrowed heavily under a private finance initiative.

But the SHA insisted that its "over-riding priority" was to develop management arrangements that would secure the future delivery of specialist services, preserving "the clinical excellence in research and training of clinicians and staff".

In a paper to the board, the SHA said a long list of options would be carefully evaluated but a final decision on the organisational form of the NOC could be decided upon by the Health Secretary.