A financially-challenged district general hospital has confirmed that it will attempt to get to foundation trust status independently.

George Eliot Hospital trust in Nuneaton had been rumoured to be merging with neighbouring University Hospitals Coventry and Warwickshire Trust.

But a spokesman this afternoon confirmed that the £108m turnover trust’s bid to the strategic health authority and the Department of Health was to be an independent foundation trust.

The proposal has not yet been signed off by the DH, which has begun sending some trusts their agreed plans for getting authorised by Monitor.

The DH head of provider development Ian Dalton last week questioned whether district general hospitals could meet the £20bn efficiency challenge “within their organisational boundaries” - indicating merger being a preferred option.

Sources in the region said a merger between two trusts was the preferred option but University Hospitals was unwilling to delay its Monitor application to incorporate the smaller trust, which is now due in 2012.

George Eliot is planning a 10 per cent cost improvment programme for this financial year, having saved only £4m last year.

Chief executive Kevin McGee, former head of Heart of England Primary Care Trust, said: “The trust’s board of directors believes that achieving foundation trust status is in the best interest of the community, the hospital and its staff. The board of directors is fully committed to becoming a foundation trust and working with the community to develop a long-term, sustainable model for the delivery of healthcare in the area.

“Our vision is of a local service provider delivering integrated care, in conjunction with local GPs, to local people.”