The administrators appointed to Mid Staffordshire Foundation Trust have made some concessions to local campaigners on the services that would be left at the two hospitals it runs.
Accident and emergency services will remain open and a midwife-led maternity unit will be opened at Stafford Hospital, but consultant-led obstetrics services will move to University Hospitals of North Staffordshire Trust.
Inpatient paediatric services will also move but a paediatric assessment unit will run alongside the A&E.
Question marks remain over the trust’s financial position, with a deficit remaining even after the administrator’s proposals are implemented.
The trust will be dissolved by the end of 2014 with staff transferred to either North Staffordshire or Royal Wolverhampton Hospitals Trust.
The recommendations will need to be approved by health secretary Jeremy Hunt in the new year.
The trust special administrator’s proposals affect approximately 7,000 patients out of a total of 184,000 who use the trust. Most services will remain as they are.
Elective surgery will continue at the trust but major and emergency surgery will move to North Staffordshire.
The special administrators, consultancy firm Ernst and Young, said if no changes were made to services the organisation would be running a deficit of £40m by 2017.
A huge public campaign, which saw more than 50,000 march through the streets of Stafford earlier this year, had urged the administrators to keep maternity and paediatric services in the town.
Alan Bloom, one of the TSAs, said: “We now have a plan for the future which means over 90 per cent of the people who currently use these hospitals continuing to do so.”
He said the trust was “financially and clinically unviable” but the proposals were “the best chance” to ensure the long-term future of services.
Mr Bloom said that by doing nothing the trust’s current £20m deficit could have almost doubled in four years’ time but under their recommendations it would fall to below £15m over the same period.
The TSAs believe their plans will save about £25m per year to 2017, while there will be £130m of capital funding to extend services at separate hospitals in Stoke, Wolverhampton and Walsall, run by University Hospital of North Staffordshire Trust (UHNS) and The Royal Wolverhampton Hospitals Trust.
About £40m of the capital investment is needed to carry out much-needed maintenance and improvement of both Cannock and Stafford Hospitals.
The proposals require the agreement of independent health watchdog Monitor, which appointed the TSAs in April, and the final approval of the health secretary by 26 February, 2014.
Any transition would happen over three years, with the new structure fully up and running by the start of 2017 financial year.
Under the new arrangement, staff would be transferred to the two other trusts, with the process beginning as soon as the recommendations get government approval.
Hugo Mascie-Taylor, one of the TSAs, said: “I think, when we started this process, many believed our recommendations would be to close these hospitals but we have been able to preserve both Stafford and Cannock, and that must be regarded as a success.”
Campaign group Support Stafford Hospital was critical of the new recommendations, with chairman Sue Hawkins saying she thought the midwife-led unit - which will have no specialist consultants on the wards - would “dwindle away” because it would not attract enough women to sustain it for more than a few years.
“We’re not happy,” she said.
“It sounds good - they’re saying 50 per cent of people could deliver here but the reality is about 10 per cent would choose to - people would choose to go elsewhere.
“We wanted inpatient paediatrics, but we haven’t been listened to.
“An assessment unit for 14 hours a day in A&E, no provision for in-patient beds and it’s not paediatricians running it.”
She said the recommendations on critical care also “sounded like a bit of a fudge”.
“What next? We have to wait for the secretary of state, although I don’t think it’s going to change,” said Ms Hawkins.
“Then we have to look to what we can do to influence the commissioners because that’s really where the power does lie.
“It’s not the end of the journey.”
Mr Bloom said that, although the TSAs had now published plans for the long-term, there were immediate concerns over short-term staffing - particularly in nursing posts - and they were working with other health trusts and commissioners to tackle the issue.