A consortium has presented a £10m private sector proposal to run pathology laboratories in Greater Manchester to four trusts in the area.

The firms are Quest Diagnostics, a private pathology company, and KPMG, the accountancy and management consultancy company.

They gave a presentation - thought to be the first of its kind - to the trusts at a meeting to discuss reconfiguration of pathology services last week.

A pathology services working group, representing Rochdale Healthcare trust, Bury Health Care trust, Oldham trust and North Manchester Health Care trust, has been discussing the relocation of pathology services to a central site for around 18 months.

Meetings have involved managers and staff representatives and there has been general agreement on the need to improve services, though funding arrangements were not discussed until last week.

The meeting heard a presentation by Quest Diagnostics business development director for Britain and Europe Karen Ward.

Ms Ward told HSJ that although the exact way in which a potential bid would work was not fixed, the transfer of the entire service, including staff, to the private company was one option. This is the situation in the other NHS contract run by Quest, for West Middlesex University Hospital trust.

Ms Ward said the company had been in discussions with many trusts around the country and both Quest and KPMG were involved in ongoing discussions with Downing Street about private companies taking on pathology services.

Ms Ward said she had given a presentation on the company to prime minister Tony Blair last year at the request of Mr Blair's office. She said: 'What the government is looking for is pathology services that are working optimally.'

Assistant Unison branch secretary at North Manchester trust Peter Hinchcliffe said: 'Unison is opposed nationally and locally to the private finance initiative. We are extremely concerned. Our members in pathology have said they wish to remain in the NHS. It has come as a real shock.'

The KPMG/Quest presentation, details of which have been seen by HSJ, says there is 'apparent support for the proposition' of a private sector bid, following discussions with the Department of Health.