The health secretary has approved the merger of three London hospital trusts to create an organisation with an estimated turnover of £1.1bn.

The decision this afternoon means Barts and the London, Whipps Cross University Hospital and Newham University Hospital trusts can continue with their plan to merge on 1 April. The merged body has been given the working title Barts Health NHS Trust.

Sources close to the merger bid said they were confident this target date was still possible, despite the approval previously being expected on 9 March.

In a statement Andrew Lansley said any change to clinical services would still need to go through public consultation and his “four tests” for such schemes, but that the merger had been proposed to “help create a sustainable future for healthcare in east London”.

“The merger is based on the current service provision and any efficiencies that can be delivered by bringing three management teams and support services together,” Mr Lansley said. “Clinical service change in any of the sites has not been proposed as part of the merger but if any change is recommended in the future this would be subject to the secretary of state’s four tests and public consultation as per normal practice.”

The merger was contentious, with one local clinical commissioning group objecting and the Co-operation and Competition Panel saying the deal would damage patient choice.

The CCP eventually recommended the merger go ahead but only because of the lack of alternative option.

Homerton University Hospital Foundation Trust, which is situated between the three merging trusts, had suggested it could take over Newham.

The merging trusts’ business case anticipated needing £93.5m in support from NHS London in the first year of the merged organisation, plus an annual £22.5m in support with its private finance initiative.

The business case said the merger would result in £7.1m of savings from the loss of 126 “back office” jobs and £4m from estates.

Stephen O’Brien, designate chair for Barts Health Trust, said: “I am absolutely delighted that the benefits of our merger have been recognised and we have achieved this final milestone on schedule.

“I strongly believe that, by sharing the expertise which is present in each of our three trusts, we can create a world-class health organisation; one which builds strong relations with our local communities and partners and which ensures that the needs of our patients always come first.”

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