Monitor has asked the Care Quality Commission to carry out a “deep dive” probe of patient care at the troubled Sherwood Forest Hospitals Foundation Trust following the resignation of chair Tracey Doucet.

The FT regulator said it had taken action after it emerged the trust plans to recall 79 women due to faulty test results relating to breast tissue biopsies.

Monitor said the “emerging concerns” would be investigated by the CQC, who launched an inspection into breast cancer services and clinical governance at the trust today (8 October).

The care quality regulator has also agreed to carry out a wider review to “reassure” Monitor it has no concerns about standards of patient care elsewhere at the trust.

In further action Monitor has appointed Chris Mellor as interim chair after former trust chair Tracey Doucet resigned with immediate effect on Thursday.

Eric Morton, former interim at University Hospitals of Morecambe Bay, has been appointed interim chief executive. He will take over from current interim Mark Goldman, whose contract expires on 15 October.

The FT regulator has also instructed Sherwood Forest to commission reviews of its quality governance and board governance; an independent external review of the trust’s financial situation; and a strategic review of its long term options for financial viability.

The trust was found in significant breach of its authorisation on 21 September because of concerns over its finances and governance.

It made a £5.9m loss in the first quarter this year, having failed to deliver recurrent savings of £10m in 2011-12.

The trust’s private finance initiative “cash outflow” last year was £42.5m – 17 per cent of its income. The PFI operating costs linked to the Retail Prices Index are inflating by around £1.5m a year.

Monitor’s chief operating officer, Stephen Hay said: “We are using our formal regulatory powers of intervention because we are concerned the trust has failed to get to grips with the scale of the problems it faces. 

“In addition to the trust’s financial difficulties our concern about its leadership has been heightened by the disclosure that some breast cancer patients are to receive an apology from the trust and an urgent review of their treatment after an investigation into faulty pathology test results.”

He added: “The reviews we have commissioned will assess whether or not this issue was identified and dealt with sufficiently promptly. If either the CQC’s inspection, or the trust’s own external expert review, reveals any other matters of concern we will not hesitate to intervene again.”

In a statement following her resignation former chair Tracey Doucet said: “Whilst there are undoubtedly more challenges ahead, there is also very much to be proud of, in particular the collective achievements in improving services and the quality of care delivered to our patients. I know that the staff at the trust will continue together on this journey over the coming months.”

John Marsh, lead governor at the trust added: “The council of Governors is extremely sorry to have lost someone who we considered to be the most able chairman the trust has ever had. We are grateful for the energy invested and the huge contribution that Tracy has made over the last five years. We will be sad to see her move on.”

On the faulty test results, Sherwood Forest said that a lab error had led to 120 women being told they had a different type of breast cancer than they actually had. An expert panel concluded around half of these women were disadvantaged in terms of treatment, and the error had resulted in an increased mortality rate among this group of 5 per cent over 10 years. Medical Director Nabeel Ali said the trust was “extremely sorry.”