The NHS has bailed out crisisstricken Hackney council in East London, where a total spending freeze left elderly people 'stuck' in hospital without social services care packages.

The move contradicts health secretary Alan Milburn's denial that NHS support for social services would mean rescuing those with 'overspends or financial problems'.

London regional office has confirmed that£250,000 in NHS funding was provided 'to resolve the immediate problems', particularly 'around hospital discharge', after financial meltdown in Hackney forced the council to freeze all spending last month.

A leading Hackney GP said the 'immediate impact' of the spending freeze was that 'elderly people got stuck at Homerton Hospital because care plans could not be funded'.

London region provided the money 'in collaboration with East London and the City health authority', a London region spokesperson said.

Hackney social services director Mary Richardson said: 'As a result of the money that health gave, there has been no deterioration in terms of blocked beds. The health money dealt with the short-term problem of not being able to make these placements.'

Dr Gaby Tobias, chair of City and Hackney primary care group, said it was 'good that people had worked together'.

Homerton Hospital trust finance director Roger Sirman said delayed discharges had been at 'what we call a reasonable level', although numbers had 'moved up slightly'.

At last month's annual social services conference, health secretary Alan Milburn said that where social services were under financial pressure, 'of course they should be receiving help from the local NHS'. He later told journalists this did not mean 'bailing out overspends or financial problems'.

The London region spokesperson stressed that the Hackney emergency money had been provided to 'make sure the impact on patients was minimal' during the council spending freeze.

The spending ban was made when the council forecast a£13m deficit by the end of the financial year unless spending was immediately curbed. The freeze was lifted on 6 November after councillors agreed a package of cuts designed to save£4.5m in this financial year and£18m next year.

London regional office said it had not received details of the package. But this week a draft council report seen by HSJ revealed the 'budget gap' for 2001-02 could be£76.4m - 'before taking account of the savings already identified'.