A trust set up by campaigners who unsuccessfully fought the closure of a hospital has made important breakthroughs in its push for a nursing home on the site.

Watlington Hospital Charitable Trust has been given priority purchaser status by the NHS which should enable it to buy the former Watlington Hospital site at below market rate.

The trust, which is also celebrating being given charitable status, now hopes to raise the district valuer's £1.4m asking price and acquire the site by next April.

Chairman Charles Farrell said: "It was a major step for us to be told we had priority purchasing rights. It's been a sad delay because we haven't been able to do anything until we got the all-clear. Now it's all systems go and we're delighted."

Subject to planning consent, the former 12-bed hospital in Hill Road will be demolished to make way for a new 32-bed nursing home.

There will also be surgeries for three GPs on the site, and about 30 flats for elderly people who need some nursing care but want to remain independent.

Mr Farrell said: "It is not just a nursing home but also a day centre for the social services."

The non profit-making Brendoncare Charitable Foundation will run the nursing home, subsidised by social services, and an endowment fund to be set up by the trust.

Former diplomat Mr Farrell said talks were already on-going with planners from South Oxfordshire District Council over outline plans for the proposed development.