The health secretary today announced that Mid Staffordshire Foundation Trust would be dissolved in line with the recommendation of the trust’s special administrators.

However, in a written statement, Jeremy Hunt asked NHS England to identify whether consultant-led maternity services could continue at Stafford Hospital. The TSAs recommended that the trust’s maternity unit should be downgraded to be midwife-led.

Mr Hunt said: “I am asking NHS England to identify whether consultant-led obstetrics could be sustained at Mid Staffs in a safe way in the future. In doing this, NHS England will work with local commissioners as part of their wider review of the local health economy.”

A consultant-led maternity unit at Stafford Hospital would require paediatricians to look after the most seriously ill babies. This would mean that paediatric inpatient facilities are required - a service that the TSAs recommended should be decommissioned.

Local campaigners have pledged to raise a legal challenge against the proposals.  

In December the TSAs recommended that the trust should be dissolved because it was “clinically unsustainable”.

An emergency department with reduced opening hours will continue at Stafford Hospital.

Consultant-led obstetrics and inpatient paediatric services will move to University Hospitals of North Staffordshire Trust, although Stafford Hospital will retain a paediatric assessment unit.

Stafford Hospital will be run by North Staffordshire and Cannock Chase Hospital will be run by Royal Wolverhampton Hospitals Trust.

Mr Hunt said: “Today’s announcement secures a first-rate offer for local patients – something they were denied for too long.”

He added: “Without over £20m in subsidy funding from the Department of Health in 2012 and 2013, the trust would have been unable to pay its staff and suppliers. At the same time, a number of services are being operated with consultant numbers below royal college guidelines, and the trust has experienced ongoing challenges in recruiting and retaining staff. Patients deserve high quality services, which are clinically sustainable.”

He said that under the new model “approximately 90 per cent” of the patients who go to Stafford and Cannock Hospitals would continue to go there.

The proposed model “can be a financially sustainable one” with funding from NHS England and further savings delivered by commissioners, Mr Hunt said.

He emphasised the “critical role” commissioners should have in the process and that commissioners should have “freedom to build upon the TSAs’ recommendations, such as in maternity, where they considered this to be sustainable and in the interests of patients.”

Mr Hunt said it was “vital that this structural change is made as soon as possible to stabilise local health services.”

Local Clinical Commissioning Groups supported the announcement.

Chair of Stafford and Surrounds CCG Dr Anne-Marie Houlder said: “We are relieved that the Secretary of State has agreed with the TSA’s proposals to dissolve the Trust. We look forward to continue to work with the TSA, new providers and the communities of Cannock and Stafford to get the best possible healthcare for the populations in which we serve.”

Chair of Cannock Chase CCG Dr Johnny McMahon said: “We have been working closely with the TSA and providers over the last few weeks and we will build on this work going forward to help support with the transition.”

Mid Staffordshire chief executive Maggie Oldham said: “I would like to pay tribute to all the staff at both Stafford and Cannock Chase hospitals who continue to focus on delivering safe and compassionate care for our patients, despite the difficulties we have faced over the past years. I hope that today’s announcement by the Secretary of State will give staff assurance that they have a part to play in the future of health services for patients in Staffordshire.”