Pilot community foundation trusts are being considered by the Department of Health, with the aim of the first one going live by the end of 2008, although the DoH will not confirm who is on the list.

Foundation trust regulator Monitor began working on models for pilots in 2006 and its board minutes for 28 March state: 'The Department of Health had selected seven pilots to further develop the CFT model.'

CFTs are one of the possible models primary care trust provider services may adopt as they become separate from PCTs' core commissioning functions.

HSJ understands the CFT pilots are being developed in Middlesbrough, Cambridgeshire, Southampton City, South Birmingham, Liverpool, Newcastle, and Ashton, Leigh and Wigan PCT areas..

However, the DoH would not confirm the sites and sent an e-mail to all PCTs on Monday evening to direct them not to discuss CFTs ahead of a national announcement in the summer.

A spokesman for the DoH said: 'We didn't want PCTs leaking information about CFTs when the final list has not been agreed. What we weren't happy with is PCTs which have actively gone out and publicised it.

'We will make an announcement of all the PCTs taking part in the CFT pilots in the summer when the full list is finalised so it's not scuppered by little bits of information when we have not finalised anything.'

Department of Health policy adviser John Pope set out a timetable for CFTs at an HSJ conference on new models for provider services last week. He said the health secretary should approve the first site in summer 2008 so that the first CFTs would appear in late 2008.

Outlining the benefits, Mr Pope said: 'CFTs are a tried and tested governance model; there would be a trust secretary to look at issues around strategy and planning.

'They would have mutual principles as they would be owned by the community, allowed the freedom to innovate and improve the service, provide a way to reconfigure acute trusts and shift care closer to home,' he added.

They would also remain part of the NHS, safeguarding staff pensions.

He said the risks were that the move could entrench monopolies and stifle competition, some services would be high cost and it could mean a return to community trusts, which were considered monopoly providers.

Mr Pope admitted it was a long and challenging process as the 'applicant organisations don't exist yet' because provider services are at various stages of separation from PCT commissioners. Also, the processes by which these organisations gain foundation status have yet to be finalised.

'Those organisation that apply to be CFTs need to prove themselves financially, prove their ability to manage and they have to consult,' Mr Pope added.

The criteria that applicants will have to meet will include an income of at least£30m, a good track record of autonomy and stability, a credible business model, a five-year plan and stakeholder buy-in.

Applicants also need to review governance and finance, and identify their income as well as having an autonomous board of directors and an infrastructure with separate accounting.

They must also have service-level agreements with support services, human resources and with commissioners.

Mr Pope said: 'At the back end of 2007 people will be fit and ready for the challenge. We are on a journey, an extremely challenging one, but look at what we did with acute trusts.

'However CFTs are not the only show in town; form should follow function and one model is not good for all situations.'

He added that CFTs have support from trade unions.