The Audit Commission has issued a public interest report outlining 'serious concerns' about a £37.9m back-dated procurement deal at Whipps Cross University Hospital trust.

The report says the trust rushed into the outsourcing deal for radiology and theatre equipment in the "misguided belief" this would improve its reported financial position at 31 March 2006.

The 12-year contract with Asteral was signed on 25 April 2006 but backdated to the end of March.

As part of the deal, Whipps Cross sold equipment with a maximum value of£3.5m for a "significantly overstated"£7.1m, but still ended the year with a£16.4m deficit.