LABOUR MPs urged Tony Blair to think again over setting up "super hospitals" after he suffered an embarrassing defeat on the flagship policy at Labour's conference yesterday.

Both North Tees and Hartlepool NHS Trust and City Hospitals Sunderland NHS Trust are in line to win foundation status next April, gaining controversial freedoms from Whitehall control.

A further four trusts - South Tyneside, Gates-head, Harrogate and York - could be in a second wave of foundation trusts, possibly as early as 2005.

But delegates at the conference yesterday overwhelmingly backed a union motion calling for the policy to be scrapped.

The Prime Minister immediately insisted he would ignore the vote and press ahead with the plans, but the defeat gave fresh ammunition to his North-East critics, who believe they will "set hospital against hospital".

And the Health and Social Care Bill, which will set up the foundation trusts, has still to clear the House of Lords, where it is expected to receive a rough ride later this month.

Kevan Jones (Durham North) said foundation status for Sunderland City Hospital would allow it to snatch staff and money from other local hospitals.

He said: "We would get rid of competition in the health service but, with foundation hospitals, we would be reintroducing it."

Frank Cook (Stockton North) said he believed the policy would hand more power to managers, rather than consultants.

He said: "Tony Blair says this idea has come from staff, but he has obviously not talked to the consultants, GPs and other staff here, because they don't want it."

The motion, drafted by union Unison, said foundation hospitals flew in the face of Labour's 1997 manifesto commitment to end the Tory internal market.

But a bullish Mr Blair predicted he would eventually win over his critics.

He said: "When you do these things you get some opposition at the beginning, but usually that opposition falls away towards the end."

The conference defeat for Mr Blair was only his third in ten years.

Despite the vote, Joan Rogers, chief executive of North Tees and Hartlepool NHS Trust, was upbeat about becoming a foundation trust.

"It is part of a process which will encourage all hospitals to improve their performance," she said.

Liz Twist, North-East head of health for Unison, urged people living around the hospitals seeking foundation status to voice their concerns by attending public meetings and writing to the trust.