ONE of the region's largest hospital trusts yesterday played down talk of a financial crisis after officials admitted it faces debts of up to £25m.

South Tees Hospitals NHS Trust, which runs the 1,000-bed James Cook University "super-hospital", in Middlesbrough, and the smaller Friarage Hospital, in Northallerton, North Yorkshire, is forecasting a £13m overspend by the end of the financial year.

Trust bosses have also had to ask regional NHS officials to provide a loan of £12m to help meet other costs.

While officials say it will be business as usual at a trust which has an annual budget of £320m, there are fears that services could be affected.

When James Cook University Hospital was declared open a year ago, NHS officials hailed the centre as a major step forward for patients in Teesside, South Durham and North Yorkshire.

With a broad range of services on one site, following the closure of Middlesbrough General Hospital, the James Cook was seen as a model for the future.

So the revelation that the trust has over-stretched itself, running up millions of pounds of debt, has come as a shock.

Public sector watchdog the Audit Commission has criticised the trust, accusing bosses of developing unrealistic budgets.

District auditor Lynne Snowball, in her annual letter to the trust, says: "Given the trust's serious financial position, the trust may be unable to meet targets and sustain and develop performances in key areas of patient services unless it implements changes in the way it delivers services."

The situation could lead to formal action by auditors if there is not a clear improvement.

The trust has imposed a recruitment freeze in some areas and is looking at ways of making savings.

Chief executive Simon Pleydell said: "Clearly the money situation is very serious and we are taking it very seriously."