Half a dozen chief executives have effectively been put on notice to turn their failing trusts around by Christmas or face the sack.

Jan Filochowski, appointed chief executive at Medway trust at the beginning of last year, was stunned to learn he was one of the six 'method one' bosses whose jobs will be 'franchised out'within three months unless the Department of Health is satisfied that the trust's performance has improved.

'When I started the trust had a multiplicity of difficulties - I was brought in along with a new chair and a completely new board, ' he said. 'The trust fell down in three areas which went back a long time.'

Data collected up to March shows the trust significantly underachieved in financial performance, meeting the two-week target for breast cancer referrals and patients having a first outpatient appointment within three months.

Mr Filochowski pointed out:

'We have gone from having a big overspend to being in balance every month, our two-week time for breast cancer referrals is 100 per cent and on outpatients we have been one of the best performers in the South East since January.

'The data refers to last year and the fact that It is pretty historic is bad news - We have done really well beyond that. Staff will not be pleased and it will be a major exercise in trying to reassure them.'

A spokesperson for the Department of Health said Medway was in the right category but added: 'He's actually doing a really good job and turning it around. It is a success story really.'

At Epsom and St Helier trust, newly appointed chief executive John de Braux is in the 'method two' group, with 12 months to get out of the no-star category.Mr de Braux was on annual leave as the star ratings were announced, but an action plan to turn the trust around has still not been agreed six weeks after publication of its highly critical Commission for Health Improvement report.

Trust chair Jennifer Denning told HSJ: 'We can't object to the grading. It is important that the public are given information about their hospitals, and with the recent CHI report I think to some extent it was inevitable.' She added: 'I do not think it is going to be easy, given the time scale, but we have already been making progress.'

Oxford Radcliffe Hospitals trust chief executive David Highton welcomed the 'exercise', despite his trust getting no stars, and said he had already asked the Modernisation Agency to visit in October. The trust has also agreed to implement more than 20 reforms, including an 'overarching' performance improvement plan agreed with the DoH.

'We are all concerned at our shortcomings and determined to put things right, ' he said. 'I have already seen some signs that we are turning the corner.'

A 'tripartite' system comprising the Modernisation Agency, the DoH performance directorate and regional offices in their last days will monitor monthly whether the no-star trusts are making necessary changes.

Modernisation Agency director David Fillingham said: 'Teams from the agency have been working with most of the trusts that have not been awarded a star for some time and will be working to support all of them in the months ahead.'