Welsh secretary Alun Michael has signalled a tougher financial regime for trusts and health authorities in Wales.

'My aim is that financial balance should be restored to all parts of the health service. Otherwise, we will drift on with the NHS believing it will be bailed out each time it cannot manage,' he told the Commons Welsh affairs committee this week.

He said the government had found an extra£175m for health services in Wales from the comprehensive spending review and£53m from 'within the current budget'.

Welsh Office figures provided for MPs showed Welsh HAs and trusts facing a financial crisis, with a forecast£21.5m deficit in the financial year that ended this week and a cumulative deficit of£54.1m.

Mr Michael blamed 'a lack of strategic management at the Welsh Office' for the problems, but promised that a 'stocktake' would provide a 'longer- term perspective' for the new Welsh assembly.

Plaid Cymru MP Elfyn Llewyd said there was 'a case for alleviation of debt' that had accumulated in HAs and trusts because of past underfunding.

But NHS Wales director Peter Gregory said: 'We are not looking to run the NHS on handouts. If you write off debt you encourage that.'

HAs and trusts should know their exact position when allocations are made this week.