Bicester has a 50 per cent chance of getting a new hospital built using council cash rather than NHS money, according to Cherwell District Council's leader.

Barry Wood made the prediction after meeting representatives from the first local authority in the country to build its own hospital.

Members of Wychavon District Council, Worcestershire, told Bicester councillors and health officials on Monday about the 26-bed hospital they are building in Pershore for £6.7m.

They plan to lease the hospital to the local health authority when it is finished in September.

Town, district and county councillors, together with members of the North East Oxfordshire NHS Primary Care Trust, saw a presentation by Wychavon and quizzed them on the project.

Mr Wood said: "I thought it was a very innovative and impressive solution to health service problems and it's one we should certainly explore for Bicester.

"We are looking at a 50/50 chance in terms of realism.

"The joy of this Wychavon solution is the council doesn't lose out, all we do is invest the money in property and not in the bank."

But he added he did not want to raise people's hopes too much.

He said: "The bottom line is it depends on whether the PCT or health authority feels able to pursue it.

"For our part we certainly want to take it as far as we can.

"We haven't got any preconceived ideas about exactly how many beds. What we want to do is enable what can be afforded. If they can afford 19 beds, we would build 19."

Mr Wood said he had asked council officers to negotiate with the local health authorities to see if the idea could be taken forward.

He expected a report to be completed within the next couple of months.

The PCT plans to close Bicester's current 12-bed hospital and replace it with a primary care centre, where beds would be provided by local care homes.

A PCT spokesman said: "It was a very interesting model. There are many similarities between what was done in Pershore, but many differences as well."

The spokesman added the PCT had secured the building costs of the new care centre.

The PCT has said Bicester does not need a 30-bed community hospital, as promised by the Government in 1998, because the nature of health care is changing.