The collapse of a private finance initiative worth more than £900m could see both sides fighting in court to recover money.

The preferred bidder for the abandoned PFI scheme in Leicester is to seek compensation for money it spent on the project.

Last week the plug was pulled on the University Hospitals of Leicester trust scheme, which would have seen three large hospitals rebuilt.

The plans for the PFI were torn up after costs spiralled from original estimates to an unaffordable£921m, and the trust decided the scheme was no longer value for money.

Building consortium Triskelion Healthcare Limited a partnership between building firms John Laing, Laing O'Rourke, and Serco Group has confirmed that it will try to secure compensation from the trust.

A spokesman for the consortium said there were 'clearly large costs associated with this project, and yes, we will be seeking repayment of those costs'.

Triskelion Healthcare was named as preferred bidder on the scheme in 2004.

'No compensation'

But trust chief executive Peter Reading denied that it would be forced to compensate the consortium.

He said legal advice given to the trust and the Department of Health suggested the trust may be able to 'claw back' an earlier£9.2m paid to the consortium in compensation after the scheme was downsized last summer.

An agreement was brokered between the DoH, the trust and the consortium to bring the size of the project down to£711m.

Mr Reading said£711m was the 'level set at which the project was best value for taxpayers' money'.

'Another£210m which was required to deliver the specified scheme meant that this was no longer the case,' he said.

'Having sought legal advice we are confident that we are not liable for further costs and may seek claw-back for the£9.2m. This dispute may end up in a court of law,' he added.

A decision was made to scrap the project last Friday after a nine-week review carried out by the trust, two local primary care trusts, the strategic health authority NHS East Midlands and the DoH found that the final cost could be even higher than£921m.

In May last year the DoH instructed the trust to cut just under£200m from its plans to revamp and reconfigure services at Leicester's General, Royal Infirmary and Glenfield hospitals.

The project, the plans for which were originally drawn up in 2001, has already cost the trust more than£30m,£9.2m of which was spent on compensating the consortium last year.

Edinburgh University research fellow and PFI expert Mark Hellowell told HSJ that although the scheme had been scrapped he believed the government would plough on with its programme to regenerate hospital estates through PFI schemes.

However, he warned if many more sizeable PFI schemes collapsed companies bidding for the work could start to get 'cold feet'.