The Co-operation and Competition Panel has recommended England’s biggest hospital merger should be allowed to go ahead - but only because there is no alternative.

In December the CCP said allowing the merger between Bart and the London, Whipps Cross and Newham hospitals would damage provision of routine elective care in Newham.

Since then it has gathered responses on proposed remedies, including an expression of interest from Homerton University Hospital Foundation Trust to merge with Newham.

This afternoon it recommended health secretary Andrew Lansley allows the merger to proceed, providing commissioners are allowed to find alternative providers to work from the Newham site if services deteriorate there under the new organisation.

It also proposed setting extra quality standards, to which commissioners could hold the new organisation to account.

CCP director Catherine Davies said: “We looked very closely at alternative merger plans for these hospitals which would not reduce patient choice in the same way. However, whilst potentially offering a better outcome for patients, we had to concede that, in reality, any such alternative plans would be subject to considerable uncertainty and delay.”

Commissioners told the CCP the merger was the only option for Whipps Cross and Newham.

Barts chief executive Peter Morris wrote to the CCP saying if the merger was not allowed to proceed he would move to achieve foundation trust status with Barts alone “as quickly as possible”.

Clinical commissioning groups were divided on the plan. Tower Hamlets and Newham Health Partnership backed the proposal in its current form. City and Hackney, and Newham supported an assessment of the separate potential merger between Newham and Homerton.

Mr Lansley must now make a decision on whether the full merger should proceed.

The combined trusts would create an organisation with a turnover estimated at £1.1bn, making it the largest provider organisation in the country.

King’s Health Partners, the south London academic health science centre, last year commissioned a report from Peter Goldsborough of Boston Consulting Group on the feasibility of merging its three member trusts Guy’s and St Thomas’, King’s College Hospital and South London and the Maudsley.

Based on the trust’s predicted 2011-12 turnovers the combined organisation would have a turnover of £2bn.

The report was presented to KHPs’ board in January and was due to be discussed at each individual trust’s board this month.