The Department of Health has agreed to lend £18m to a struggling foundation trust.

Health secretary Andrew Lansley confirmed the sum would be paid to Heatherwood and Wexham Park Hospitals Foundation Trust on a visit  last week and stated the funding was not a “bail out”.

The sum will be paid in this financial year and repaid over the next decade.

The DH said the loan would “maintain essential services to patients” and that it would be “based on commercial principles”.

The loan will carry an interest rate of 2.15 per cent for £10m which is for ongoing capital developments and internal restructuring. The remaining £8m will be drawn down by the foundation when needed and repaid at an interest rate of 0.65 per cent - which relates to the London Interbank Offered Rate (LIBOR) set by the British Bankers Association.

A spokeswoman for the DH added that any “further requirements” from the foundation over the next two financial years would be considered nearer the time.

Mr Lansley said: “I have confirmed that the department will offer the trust a loan totalling £18m in 2010-11, to enable them to turn around their financial position while maintaining a high standard of patient care.

“I have been clear that this is not a bail out - it will need to be repaid in full and is conditional on the trust demonstrating that they will meet their ongoing commitments in terms of quality and financial stability.

“This arrangement will maintain quality patient care and ensure value for money for taxpayers, while being consistent with our vision set out in the white paper.

“Our vision for foundation trusts is about autonomy and accountability. But with freedom comes responsibility. We will not bail out organisations that fail to manage themselves effectively. Foundation trusts must demonstrate that they can manage their finances and as such Heatherwood and Wexham must prove itself and repay this loan in full.”