NHS chiefs have given the green light for work on plans to upgrade an ageing hospital to go ahead.

Concerns had been raised about the availability of cash to overhaul Shotley Bridge Hospital, which is currently dealing with a maintenance backlog worth about £2 million.

But the North Durham Clinical Commissioning Group (CCG) has confirmed the Department of Health and Social Care has given it permission to press ahead with developing its proposals for the site.

Rachel Rooney, head of engagement, commissioning and development at the CCG, said: “The CCG’s plans to consult on services provided at Shotley Bridge remain in place and we are delighted progress has been made.

“We are working closely with County Durham and Darlington NHS Foundation Trust, NHS England, NHS Property Services and the Department of Health and Social Care to understand how we will move ahead with business case development and assurance”.

The announcement comes after months of uncertainty over the viability of the project after health bosses in the region were told the £17 million they had expected to receive for the project may not be forthcoming.

Government rules meant the CCG needed to have funding secured before it could start a public consultation on the future of services at the hospital.

But a business case for the plans is now set to be drawn up after care bosses confirmed they now have an ‘identified funding source’.

Durham County Councillor Lucy Hovvels, chairwoman of the Shotley Bridge Hospital Reference Group, said: “The people of the area deserve high quality hospital facilities and this investment will help to improve health outcomes and reduce inequalities.

“A great deal of work has been put into determining the best way to secure the future of the hospital and I know this is an issue that residents feel incredibly strongly about.”